Rebounding oil prices turn QSE second best performer
March 11 2016 07:29 PM
Buying support from local and non-Qatari individual investors was mainly instrumental in lifting the sentiments during the week.

By Santhosh V. Perumal/Business Reporter

Oil price rebound to above $40 a barrel had its reflection in the Qatar Stock Exchange (QSE), which was the second best performer within the Gulf bourses during the week.

Buying support from local and non-Qatari individual investors was mainly instrumental in lifting the sentiments during the week which saw the Institute of Chartered Accountants of England and Wales (ICAEW) project Qatar’s economy to grow 4.3% this year, driven by substantial infrastructure investment.

Micro cap equities notably found much favour in the market during the week which also saw ICAEW forecast that the oil market may return to balance only by 2017, implying a prolonged period of price weakness with Brent crude expected to average $32 per barrel this year and remain below $70 for the rest of this decade.

Investors’ demand was seen higher especially in the insurance, real estate and telecom counters during the week which witnessed that Doha Bank announce revisiting its three-year strategic plan for 2016-18, especially in relation to its overseas operations, as well as diversifying income sources, in view of expected “pressure” on domestic lenders’ performance during 2016 and 2017.

A substantially lower selling pressure from domestic institutions also helped maintain bullish rally in the market during the week which saw Mesaieed Petrochemical Holding Company (MPHC) disclose further cost optimisation this year to enhance efficiency and shareholders’ value.

However, foreign institutions’ net buying support considerably weakened during the week which saw trading turnover and volumes decline.

The bourse opened the week stronger on Monday (as Sunday being a holiday) and kept gaining for the subsequent day on reports of oil breaching the $40 a barrel. However, it lost its steam on Wednesday on technical correction amid reports that one of the Gulf nations wants all producers to freeze output. The index then almost remained flat to finally close 250 points higher on Thursday.

The 20-stock Qatar Index gained 2.47% during the week which saw Dubai surge 3.23%, Saudi Arabia (2.22%), Abu Dhabi (1.8%) and Kuwait (0.78%); whereas Muscat and Bahrain fell 2.11% and 1.68% respectively.

QSE is down 0.41% year-to-date vis-à-vis Saudi Arabia’s 8.06% decline, Kuwait (5.88%), Bahrain (5.04%) and Muscat (2.14%); while Dubai and Abu Dhabi gained 6.48% and 4.47% respectively.

The 20-stock Total Return Index surged 2.84%, All Share Index (comprising wider constituents) by 2.46% and Al Rayan Islamic Index by 2.81% during the week which saw banking, industrials and realty stocks constitute more than 71% of the total trading volumes.

Insurance stocks shot up 8.19%, real estate (4.29%), telecom (3.82%), industrials (1.86%), banks and financial services (1.6%), consumer goods (0.49%) and transport (0.36%) during the week.

Market capitalisation expanded 1.54% ore more than QR8bn to QR545.21bn with micro, large and mid-cap equities gaining 2.56%, 1.77% and 1.27% respectively; even as small caps were down 0.56% during the week which saw Gulf International Services (GIS) dominate the trading ring in terms of volume and value.

Large, small and micro-cap equities have fallen 3.54%, 2.91% and 2.33% respectively year-to-date; whereas mid-caps soared 4.88%.

Of the 43 stocks, as many as 31 advanced, while only 11 declined and one was not traded. Nine of the 12 banks and financial services; six of the eight consumer goods; five of the nine industrials; four of the five insurers; three of the four realty; and two each of the three transport and the two telecom stocks closed higher during the week.

About 74% of the stocks extended gains with major gainers being Dlala, Islamic Holding Group, Qatar Insurance, GIS, Qatari German Company for Medical Devices, Vodafone Qatar, Commercial Bank, Qatar Islamic Bank and Alijarah Holding; even as United Development Company, Doha Bank, Woqod, Gulf Warehousing and Mannai Corporation were seen bucking the trend.

Local retail investors turned net buyers to the tune of QR13.91mn against net sellers of QR74.69mn the week ended March 3.

Non-Qatari retail investors were also net buyers to the extent of QR4.92mn compared with net sellers of QR11mn the previous week.

Domestic institutions’ net profit booking weakened considerably to QR78.88mn against QR108.61mn the week ended March 3.

However, foreign institutions’ net buying declined perceptibly to QR59.83mn compared to QR194.3mn the previous week.

Total trade volume fell 18% to 52.31mn shares, value by 26% to QR1.7bn and transactions by 16% to 24,120 during the week.

There was 56% plunge in the insurance sector’s trade volume to 0.41mn equities, 55% in value to QR25.98mn and 34% in deals to 485.

The transport sector’s trade volume plummeted 53% to 1.88mn stocks, value by 51% to QR57.17mn and transactions by 56% to 656.

The banks and financial services sector saw 31% shrinkage in trade volume to 12.95mn shares, 36% in value to QR568.37mn and 9% in deals to 7,720.

The telecom sector’s trade volume tanked 22% to 5.77mn equities, 30% in value to QR117.32mn and transactions by 28% to 2,853.

The real estate sector reported 17% decline in trade volume to 11.79mn stocks, 12% in value to QR272.65mn and 8% in deals to 3,845.

The consumer goods sector’s trade volume shrank 4% to 7.04mn shares, value by 42% to QR149.39mn and transactions by 29% to 2,630.

However, the market witnessed 10% increase in the industrials sector’s trade volume to 12.47mn equities and 3% in value to QR505.45mn but on 5% fall in deals to 5,931.

In the debt market, there was no trading of treasury bills and government bonds during the week.

Last updated: March 11 2016 07:57 PM

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