By Santhosh V. Perumal/Business Reporter
The Brexit woes-led initial decline had its overall bearish spell in the Qatar Stock Exchange (QSE) which closed the week in the negative terrain, becoming the second worst performer among the Gulf bourses despite strong buying support from foreign institutions.
Domestic institutions were seen net sellers during the week which saw the Institute of International Finance (IIF) say Qatar will remain the fastest growing at 3.7% this year and 3.8% in 2017 in the Middle East and North African region, mainly driven by 2022 World Cup-related projects.
"The Brexit concerns have been discounted by the market, where trading has remained shallow in view of Ramadan and summer holidays," an analyst with a leading brokerage house said.
Profit booking was seen stronger especially in the realty, industrials and telecom counters as the QSE 20-stock Qatar Index shed 0.81% during the week which witnessed IIF also say Qatar, which has already used its central bank's official reserves to finance the budgetary deficit, could witness overcapacity over the medium term through large sovereign investments and may find it difficult to deal with excessive debt build up, unless the new infrastructure supports development and diversification.
In comparison, Dubai bourse shrank 1.68%, Kuwait (0.8%), Saudi Arabia (0.78%), Muscat (0.34%) and Abu Dhabi and Bahrain (0.05% each) during the week which saw Kamco Research view that the fall in UK's currency, post Brexit, is expected to have a positive impact on the Gulf Cooperation Council's (GCC) current account balances this year and the UK property is set to look attractive to Gulf investors.
The Qatari bourse is down 5.22% year to-date vis-à-vis 8.02% plunge in Bahrain, 5.96% in Saudi Arabia and 4.46% in Kuwait; whereas Muscat, Dubai and Abu Dhabi gained 6.86%, 5.08% and 4.42% respectively.
Opening the week weak at 9,843 points on Sunday, largely on the week-end Brexit that led global bourses melt, the QSE witnessed further correction on Monday to reach a low of 9,817 points. Thereafter, the market was on a winning streak for the rest of the session but overall it settled 81 points lower during the week which saw Global Investment House view that a prolonged period of lower interest rate regime, in view of Brexit, should be positive to the GCC economies.
The 20-stock Total Return Index shed 0.81%, All Share Index (comprising wider constituents) by 0.79% and Al Rayan Islamic Index 1.26% during the week which saw IIF say Qatar's foreign exchange rate regime is expected to remain unchanged despite the loss of competitiveness.
Real estate stocks tanked 1.8%, industrials (1.79%), telecom (1.05%), banks and financial services (0.45%) and transport (0.07%); whereas insurance and consumer goods gained 2.13% and 0.17% respectively during the week which saw overall trading turnover and volumes however on the rise.
Market capitalisation eroded 0.87% or about QR5bn to QR532.7bn as micro, mid and large cap equities fell 0.86%, 0.71% and 0.54% respectively; even as small caps rose 0.31% during the week which also saw banking, industrials, real estate and telecom stocks together constituted about 85% of the total volume.
Large, mid, small and microcap stocks have fallen year-to-date 6.79%, 5.52%, 3.77% and 0.05% respectively.
Of the 44 stocks, as many as 32 declined, while only 11 gained and one was not traded during the week.
As many as 10 of the 13 banks and financial services; eight of the nine industrials; five of the eight consumer goods; all of the four real estate; two each of the five insurers and the three transport; and one of the two telecom equities closed higher during the week.
More than 74% of the scrips were in the red with major losers being Industries Qatar, Qatari Investors Group, Qatar National Cement, Gulf International Services, Mesaieed Petrochemical Holding, Mazaya Qatar, Ezdan, Barwa, Ooredoo, Nakilat, QNB and Doha Bank; even as Qatar Insurance, Dlala, Milaha, Qatar Electricity and Water and Zad Holding bucked the trend during the week.
Domestic institutions turned net sellers to the tune of QR30.06mn against net buyers of QR22.15mn the previous week.
Non-Qatari individual investors’ net profit booking increased to QR13.61mn compared to QR8.44mn the week ended June 23.
However, foreign institutions’ net buying increased substantially to QR79.03mn against QR40.25mn the previous week.
Local retail investors’ net profit booking declined to QR35.36mn compared to QR54.01mn the week ended June 23.
Total trade volume rose 20% to 18.69mn shares, value by 4% to QR602.33mn and transactions by 9% to 10,419 during the week.
The market witnessed 83% surge in the transport sector’s trade volume to 1.15mn equities, 29% in value to QR37.17mn and 50% in deals to 645.
The insurance sector’s trade volume soared 75% to 0.35mn stocks, value by 76% to QR24.08mn and transactions by 13% to 286.
There was 42% expansion in the telecom sector’s trade volume to 2.69mn shares but on 5% fall in value to QR42.26mn and 12% in deals to 1,007.
The consumer goods sector’s trade volume increased 25% to 1.4mn equities, value by 16% to QR57.77mn and transactions by 4% to 1,015.
The banks and financial services sector reported 16% jump in trade volume to 6.2mn stocks but on 5% fall in value to QR222.2mn. Deals gained 20% to 3,420.
The industrials sector’s trade volume shot up 12% to 3.68mn shares, value by 9% to QR152.46mn and transactions by 21% to 2,554.
The real estate sector saw 7% rise in trade volume to 3.22mn equities but on less than 1% decline in value to QR66.38mn and 15% in deals to 1,492.
In the debt market, there was no trading of treasury bills and government bonds during the week.
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