By Santhosh V Perumal/Business Reporter
Large cap equities witnessed higher than average selling pressure, leading to a whopping 187 points plunge in the Qatar Stock Exchange (QSE) and its key index settled below the 11,600 mark during the week.
Domestic institutions’ increased net profit booking was instrumental in imparting an overall bearish momentum during the week that saw a Commerzbank study say Qatari banking system, which experienced a divergence in growth patterns lately, has low probability of systemic risks due to strong government support and progress on Basel III regulatory reforms.
Real estate and banking counters were subjected to heavier selling pressure during the week that witnessed Qatar Central Securities Depository make the necessary amendments to allow Nakilat accommodate foreign ownership up to 49%.
The index that tracks Shariah-principled stocks was, however, seen melting slower than the other indices in the market during the week that saw World Islamic Banking Conference commissioned study find that Islamic lenders in Qatar, led by Masraf Al Rayan and QIIB, were the most efficient in global Islamic finance industry in terms of cost-to-income ratio.
However, there were increased buying interests from local retail investors and foreign institutions during the week that saw Gulf Warehousing Company witness a total of 49,590 rights valued at QR1.28bn being traded in 92 transactions.
Six of the seven sectors were under selling pressure as the 20-stock Qatar Index shrank 1.59% during the week that saw global credit rating agency Moody’s say that Qatar has become the fastest growing insurance market in the Gulf region, registering a compound annual growth rate of 20.7% between 2006 and 2014.
Saudi Arabia plunged 4.11%, Dubai (2.95%), Abu Dhabi (1.17%), Bahrain (0.28%) and Muscat (0.06%); whereas Kuwait gained 0.86% during the week that witnessed Masraf Al Rayan team up with London Central Portfolio, residential fund and asset managers, to finance the latter’s Shariah-compliant property fund, London Central Apartments III.
QSE is down 5.71% year-to-date against Bahrain’s 12.09%, Kuwait’s 11.55%, Saudi Arabia’s 11.41%, Muscat’s 6.9%, Dubai’s 4.92% and Abu Dhabi’s 0.96%.
The 20-stock Total Return Index tanked 1.59% and All Share Index (comprising wider constituents) by 1.5% and Al Rayan Islamic Index by 1.25% during the week that saw QNB inform the World Federation of Exchanges that strong macroeconomic fundamentals, zero tax regime, attractive valuation and strong future projects make Gulf markets a strong investment candidate for world the economies to look into the prospects.
Opening the week weak, the market witnessed some gains on Monday to take the index to a high of 11,788 points, after which it witnessed a sustained profit booking for the rest of the session and thus settle at 11,585 points.
Realty stocks plummeted 3.24%, banks and financial services (1.93%), industrials (1.42%), telecom (1.05%), consumer goods (0.43%) and insurance (0.12%); while transport surged 3.45% during the week that witnessed the Ministry of Development Planning and Statistics figures suggest that Qatar’s cost of living, based on consumer price index, rise 1.5% year-on-year in September this year on double-digit increase in education expenses, higher rents and costlier tobacco and transport.
Of the 43 stocks, only 14 gained, while 26 fell and two were unchanged. Another one was not traded during the week that saw the real estate, telecom, transport and banking sectors together constitute more than 86% of the overall trading volume.
Eight of the 12 banks and financial services, seven of the nine industrials, five of the eight consumer goods, three of the five insurers and one each of the four realty, the two telecom and the three transport stocks closed lower during the week.
More than 60% of the traded stocks were in the red with major shakers being Dlala, Al Khaleej Takaful, Ezdan, Islamic Holding Group and Gulf International Services; whereas Nakilat, Qatar Industrial Manufacturing Company, Qatar Islamic Insurance and Qatar General and Reinsurance bucked the trend during the week.
Market capitalisation eroded 1.6% or about QR10bn to QR608.02bn with large, micro and small caps melting 2.02%, 1.24% and 0.1% respectively; even as mid caps soared 1.22% during the week.
Large, micro and mid cap stocks have reported year-to-date declines of 13.23%. 7.04% and 0.51% respectively; while small caps gained 6.29%.
Domestic institutions’ net profit booking strengthened to QR92.17mn compared to QR63.27mn the previous week.
However, foreign institutions’ net buying increased to QR46.72mn against QR33.73mn the week ended October 15.
Local retail investors’ net buying also strengthened to QR64.24mn compared to QR49.55mn the previous week.
Non-Qatari retail investors’ net profit booking marginally fell to QR18.62mn against QR19.88mn the week ended October 15.
Total trade volume rose 34% to 53.37mn shares and value by 13% to QR1.58bn, while transactions were down 8% to 19,443 during the week.
The transport sector’s trade volume almost quadrupled to 8.98mn equities and value more than tripled to QR227.15mn on 67% expansion in deals to 2,404. The real estate sector saw 72% surge in the trade volume to 19.2mn stocks, 49% in value to QR391.63mn and 21% in transactions to 4,050.
The telecom sector’s trade volume expanded 12% to 11.71mn shares and value by 3% to QR189.45mn but deals were down 6% to 2,533.
There was 10% increase in the insurance sector’s trade volume to 0.33mn equities, 5% in value to QR25.76mn and 28% in transactions to 353.
The consumer goods sector’s trade volume was up 4% to 2.27mn stocks and value by 2% to QR94mn; while deals fell 11% to 1,432.
However, the banks and financial services sector reported 24% plunge in trade volume to 6.06mn shares, 21% in value to QR346.67mn and 29% in transactions to 4,215.
The industrials sector’s trade volume tanked 11% to 4.83mn equities, value by 7% to QR303.59mn and deals by 23% to 4,456.
In the debt market, there was no trading of treasury bills, while as many as 2,000 government bonds valued at QR20.06mn changed hands across one transaction during the week.
