The rebound of oil prices in the world market and later losing steam had had its reflection on the Qatar Stock Exchange (QSE), which was the third worst performer among the Gulf Cooperation Council (GCC) bourses, closing a huge 140 points lower during the week.
Increased net selling by local retail investors and reduced buying support from foreign institutions were seen instrumental in dragging the bourse during the week which saw Commercial Bank announce its plans to raise as much as $8.5bn debt from the overseas markets.
The 20-stock Qatar Index shed 1.35% during the week which saw Moody’s, a global credit rating agency, view that Qatar has a larger room for manoeuvre to absorb deficits due to its vast reserves but may lead to fiscal laxity.
In comparison, Abu Dhabi sharply fell 3.28%, Dubai (1.95%), Saudi Arabia (0.68%) and Bahrain (0.33%); while Muscat and Kuwait rose 3.88% and 0.12% respectively during the week which saw Doha Bank group chief executive R Seetharaman expecting the bank's credit expansion at a modest 5% this year, below the industry average of 8%.
The QSE has, however, fallen 1.38% year-to-date against a plunge of 8.11% in Saudi Arabia, 6.17% in Kuwait and 4.68% in Bahrain; whereas Dubai, Muscat and Abu Dhabi gained 5.32%, 2.36% and 0.57% respectively.
Opening the week weak at 10,415 points, the QSE witnessed gains for the next two days to reach a high 10,490 points on renewed hopes of production freeze, which sent global oil prices above $41 a barrel. However, global oil prices slide, basically on strengthening dollar, drove the global bourses down, which was reflected on the QSE as well with it on a declining path for the next two days and settle at less than 10,300 levels.
Profit booking was seen more pronounced in the insurance, telecom and real estate during the week which also saw Seetharaman forecast that oil price may touch $50 a barrel in six months and then stabilise at $60 within a year.
Selling pressure was squarely visible in the large cap stocks during the week which saw Capital Intelligence, the international credit rating agency, affirm Doha Bank’s financial strength rating at ‘A’.
However, domestic institutions’ net profit booking weakened during the week which witnessed Ernst and Young, a global consultant, say that integration in the GCC could boost the regional economy by $36bn to make it the world’s sixth largest bloc by 2030.
However, Islamic stocks witnessed gains on the QSE during the week which saw Indosuez Wealth Management say that the GCC could potentially carve out a competitive advantage by pursuing structural reforms to improve the fiscal and economic landscape in the region.
The 20-stock Total Return Index shrank 1.09% and All Share Index (comprising wider constituents) by 0.35%; while Al Rayan Islamic Index was up 0.29% during the week which saw trading turnover and volumes on the decline.
Insurance stocks tanked 3.53%, telecom (2.89%), realty (2.15%), banks and financial services (0.41%) and industrials (0.09%); whereas consumer goods and transport surged 5.29% and 4.26% respectively during the week which saw banking, real estate, industrials and consumer goods stocks constitute more than 87% of the total trading volume.
Market capitalisation eroded 0.62% or more than QR3bn to QR544.7bn with large and midcap equities melting 1% and 0.05%; even as micro and small caps soared 2.34% and 0.66% respectively during the week which saw Boston Consulting Group say a massive decline in oil prices has led GCC banks’ revenue growth plunge to single-digit in 2015 and profit expansion considerably slowdown to 6.3% against 14.7% a year ago.
Of the 43 stocks, as many as 23 declined, while 18 gained and one two were unchanged during the week which saw Masraf Al Rayan and Gulf International Services (GIS) dominate the trading ring in terms of volume and value.
Six of the 12 banks and financial services; all of the five insurers; four of the nine industrials; three each of the eight consumer goods and the four real estate; and all of the two telecom stocks closed lower during the week.
More than 53% of the stocks were in the red with major losers being Commercial Bank, Qatari German Company for Medical Devices, GIS and Qatar Insurance; while Gulf Warehousing, Woqod, Qatar National Cement and Qatari Investors Group were seen bucking the trend during the week.
Local retail investors’ net profit booking increased substantially to QR51.23mn against QR19.68mn the previous week.
Foreign institutions’ net buying weakened perceptibly to QR168.58mn compared to QR284.84mn the week ended March 17.
Non-Qatari retail investors’ net profit booking weakened to QR3.87mn against QR15.45mn the previous week.
However, domestic institutions’ net profit booking fell considerably to QR113.48mn compared to QR249.5mn the week ended March 17.
Total trade volume fell 31% to 51.41mn shares, value by 9% to QR1.93bn and transactions by 11% to 26,356 during the week.
The telecom sector saw 57% plunge in trade volume to 3.76mn equities, 47% in value to QR85.19mn and 26% in deals to 2,683.
The consumer goods sector’s trade volume plummeted 39% to 6.68mn stocks, while value gained 30% to QR311.61mn and transactions by 14% to 4,248.
There was 38% shrinkage in the transport sector’s trade volume to 1.91mn shares and 17% in value to QR75.82mn but on 1% jump in deals to 1,135.
The banks and financial services sector’s trade volume tanked 30% to 17.59mn equities, value by 9% to QR788.33mn and transactions by 19% to 7,839.
The market witnessed 27% decline in the real estate sector’s trade volume to 11.27mn stocks, 33% in value to QR223.04mn and 26% in deals to 4,101.
The industrials sector’s trade volume shrank 17% to 9.22mn shares, whereas value rose 4% to QR401.84mn and transactions by 1% to 5,578.
However, the insurance sector reported 92% surge in trade volume to 0.98mn equities, 35% in value to QR47.45mn and 51% in deals to 772.
In the debt market, there was no trading of treasury bills and government bonds during the week.
Increased net selling by local retail investors and reduced buying support from foreign institutions were seen instrumental in dragging the bourse during the week.