Profit booking drags down Qatar share index

By Santhosh V. Perumal Business Reporter

An across-the-board profit booking led a bearish spell on the Qatar Stock Exchange and its key index settled below the 11,800 mark and capitalisation lost more than QR7bn during the week which otherwise witnessed substantial increase in trading compared to that in truncated previous week. Increased net selling by foreign institutions was seen during the week which saw an international credit rating agency Capital Intelligence affirm Qatar's long-term foreign and local currency ratings of ‘AA-’ and short-term foreign and local currency ratings at ‘A1+’ with “stable” outlook. Telecom, consumer goods, real estate and insurance sectors were the hardest hit as the 20-stock Qatar Index knocked off 1.33% during the week which saw Qatar Development Bank ink agreement with Commercial Bank for its ‘Al Dhameen portfolio’ programme to support further expansion of small and medium enterprises in Qatar. Saudi Arabian bourse had fallen 2.93%, Dubai (1.38%), Abu Dhabi (1.34%), Kuwait (0.52%), Muscat (0.5%) and Bahrain (0.4%) during the week which witnessed global credit rating agency Standard & Poor's affirm its ‘A-’ insurer financial strength and counterparty credit ratings on Doha Insurance with a “stable” outlook. Doha’s bourse is year-to-date down 4.07% against Bahrain’s and Muscat’s declines of 6.65% and 4.31% respectively; even as Dubai gained 9.78%, Saudi Arabia (9.18%), Abu Dhabi (6.74%) and Muscat (3.39%). However, increased net buying was seen among local retail and institutions as well as non-Qatari individual investors in the market during the week which International Quality and Productivity Center say Inflation is a “serious” issue for the construction sector and the “restrictive” banking norms has “knock-on” effects on the industry in Qatar, which, otherwise, host fresh opportunities. The index that tracks Shariah-principled stocks was seen melting the most in the market during the week which featured a report from the Ministry of Development Planning and Statistics that found a drastic fall in hydrocarbons export earnings has resulted in Qatar's trade surplus shrink about 53% year-on-year to QR14.88bn in June this year. The 20-stock Total Return Index fell 1.33%, All Share Index (comprising wider constituents) by 1.31% and Al Rayan Islamic Index by 1.39% during the week which witnessed QNB, in association with Qatar Insurance Company (QIC), launched cargo insurance service as part of strengthening its bancassurance business. Telecom stocks shrank 3.01%, consumer goods (2.7%), realty (2.21%), insurance (2.14%), industrials (1.32%), banks and financial services (0.54%) and transport (0.31%) during the week which saw Qatar’s transport sector witnessed a healthy double-digit expansion in profitability in the first half of this year, mainly on the back of robust earnings in the logistics segment; reflecting the promising potential for the sector in view of vast opportunities in the country. Of the 43 stocks, only five gained, while 37 declined and one was unchanged during the week which saw Al Meera Consumer Goods Company's subsidiaries complete their 49% stake sale in Al Oumara Bakeries to Qatar Quality Food for QR3mn.Ten of the 12 banks and financial services; eight of the nine industrials; seven of the eight consumer goods; all of the five insurers; three of the four real estate; and two each of the two telecom and the three transport sector equities closed lower during the week which saw realty, banking and industrials stocks constitute more than three-fourth of the trading volume. Major losers included QNB, IQ, Ooredoo, Vodafone Qatar, Gulf International Services, Commercial Bank, Qatar Islamic Bank, Masraf Al Rayan, Alijarah Holding, Nakilat, Mazaya Qatar, Ezdan and Salam International Investment; even as Barwa, Doha Bank, Qatar Insurance, United Development Company, Mannai Corporation and Al Meera bucked the trend during the week. Market capitalisation eroded 1.17% to QR626.44bn with micro, mid, small and large cap equities melting 2.34%, 1.38%, 1.01% and 0.97% respectively during the week. Large cap equities are down 11.72% year-to-date; whereas small, micro and mid caps gained 13.02%, 5.35% and 2.38% respectively. Foreign institutions’ net profit booking strengthened to QR83.91mn against QR29.78mn the week ended July 23. However, domestic institutions’ net buying rose to QR31.68mn compared to QR12.75mn the previous week. Non-Qatari retail investors’ net buying also strengthened to QR5.06mn against QR0.91mn the week ended July 23. Local retail investors’ net buying substantially soared to QR47.27mn compared to QR16.07mn the previous week. Total trade volume more than tripled to 23.21mn shares and value also more than tripled to QR1.01bn on five-fold jump in transactions to 29,763 during the week. The transport sector’s trade volume grew almost eight-fold to 0.71mn equities and value by almost seven-fold to QR30.68mn on more than five-fold increase in deals to 1,025. The insurance sector’s trade volume grew more than five-fold to 0.94mn stocks and value more than quadrupled to QR58.83mn on almost 17-fold rise in transactions to 3,026. The real estate sector’s trade volume rose almost five-fold to 8.96mn shares and value more than quadrupled to QR234.98mn on almost six-fold expansion in deals to 5,560. The telecom sector’s trade volume more than quadrupled to 2.12mn equities and value more than tripled to QR50.34mn on more than doubled transactions to 1,293. The industrials sector’s trade volume more than tripled to 2.98mn stocks and value almost tripled to QR186.72mn on more than quadrupled deals to 5,901. The consumer goods sector’s trade volume almost tripled to 2.98mn shares and value more than quadrupled to QR139.32mn on more than nine-fold surge in transactions to 5,793. The banks and financial services sector’s trade volume more than doubled to 5.56mn equities and value also more than doubled to QR311.32mn on almost quadrupled deals to 7,165. In the debt market, there was no trading of treasury bills and government bonds during the week.