An across the board selling, with more than 91% of the traded stocks in the red, led the Qatar Stock Exchange (QSE) traverse through negative terrain and capitalisation erode QR20bn in a week that otherwise saw global oil markets largely remain range bound.
Large cap equities suffered the most as the QSE main barometer plunged 3.82% during the week which witnessed market heavyweight Industries Qatar (IQ) report QR3bn net profit in 2016. The local bourse was the second worst performer among the Gulf bourses.
Abu Dhabi had recorded 3.85% decline, Dubai (2.1%), Saudi Arabia (0.51%) and Kuwait (0.13%), whereas Muscat and Bahrain gained 0.9% and 0.59% respectively during the week which saw Qatar Electricity and Water Company’s (QEWC) 2016 net profit at QR1.54bn.
QSE’s year-to-date gains were seen at 1.28% compared to 19.06% in Kuwait, 7.15% in Bahrain, 2.63% in Dubai and Muscat (0.34%), while Abu Dhabi and Saudi Arabia declined 2.2% and 1.55% respectively.
Foreign institutions’ net profit booking and a substantially weaker buying support from their domestic counterparts were responsible for the overall bearish overhang in the QSE during the week which saw Dlala Holding register QR3.8mn in net profit in 2016.
Nevertheless, local retail investors turned bullish and there were increased buying interests from their non-Qatari counterparts during the week which saw Doha Insurance announces plans to convert its Islamic branch 'Doha Takaful' into a full-scale Shariah-principled insurance company as part of its overall restructuring in line with local and regional expansion plans.
Islamic stocks were seen underperforming the main index during the week which saw insurance and consumer goods witness faster decline in trade volume and value.
Overall trade turnover and volumes were on the decline during the week which saw realty, telecom and banking sectors together account for about 82% of the volumes.
In volumes, real estate constituted 37% of the total, followed by telecom (25%), banks and financial services (20%), industrials (8%), transport (6%), consumer goods (4%) and insurance (1%) during the week which saw Vodafone Qatar, which follows April-March financial year, report distributable profits of QR107mn in the first nine months of 2016.
In value, banks and financial services’ share was 33%, followed by realty (24%), industrials and telecom (12% each), consumer goods (9%), transport (7%) and insurance (3%) during the week which witnessed global insurance credit rating agency A M Best affirm the financial strength rating of 'A- (Excellent)' and the long-term issuer credit rating of “a-” of Qatar General Insurance and Reinsurance Company with "stable" outlook.
Opening the week marginally weak at 10,885 points, the market then saw severe profit booking for the next two days as global oil prices rather saw decline. Thereafter, the decline in the local bourse was rather slow but overall the 20-stock Qatar Index settled 419 points power.
"The market has lost its upward steam after it recorded a top near 11,100 points and could witness further weaknesses on the coming period," a Kamco technical analysis said, adding the next support level comes at 10,550 points, while below it would trigger 10,350 points.
The 20-stock Total Return Index tanked 3.82%, All Share Index (comprising wider constituents) by 3.43% and Al Rayan Islamic Index by 2.83% during the week which saw global consultant strategy& view that the Gulf Cooperation Council (GCC) could generate more than $400bn through privatisation and also save $164bn in capital expenditure in the next five years by bringing the private sector onboard.
Telecom sector saw its index plummet 4.45%, insurance (3.82%), banks and financial services (3.81%), real estate (3.7%), industrials (3.63%), transport (1.1%) and consumer goods (0.71%) during the week which saw BMI view that the GCC banks, which are expected to witness slowdown in credit off-take for the next five years and face pressure to strengthen their capital base in view of Basel III norms, could however earn higher interest earnings from increased sovereign debt issuances.
Market capitalisation eroded 3.46% to QR568.06bn as large, mid, small and microcap equities melted 4.11%. 2.33%, 1.4% and 1.06% respectively during the week which saw Baker McKenzie disclose that Qatar emerged topper in the Middle East outbound merger and acquisition by value in 2016.
Micro, large, small and midcap stocks have however reported year-to-date gains of 1.98%, 1.68%, 0.78% and 0.06% respectively.
Of the 44 stocks, as many as 39 declined, while only four rose during the week which saw Vodafone Qatar, Ezdan, Barwa and Masraf Al Rayan dominate the trading ring in volumes and value.
All of the 13 banks and financial services, the eight industrials, the four real estate, the three transport and the two telecom, five of the nine industrials and four of the five insurers closed lower during the week.
Major losers included Ooredoo, Qatar Insurance, QNB, IQ, Commercial Bank, Masraf Al Rayan, QEWC, Gulf International Services, Ahli Bank, Doha Bank, Qatari Investors Group, Gulf Warehousing, Barwa, Ezdan, Mazaya Qatar and Alijarah Holding during the week.
Nevertheless, Zad Holding, Doha Insurance, Salam International Investment and Qatari German Company for Medical Devices were among the gainers during the week.
Foreign institutions turned net sellers to the tune of QR126.44mn compared with net buyers of QR40.53mn the previous week.
Domestic institutions’ net buying weakened substantially to QR65.66mn against QR103.3mn the week ended January 26.
However, local retail investors turned net buyers to the extent of QR50.99mn compared with net sellers of QR144.79mn the previous week.
Non-Qatari individual investors’ net buying increased to QR9.68mn against QR1.23mn the week ended January 26.
Total trade volume fell 26% to 32.94mn shares, value by 27% to QR997.93mn and transactions by 13% to 14,569 during the week.
There was 61% plunge in the insurance sector’s trade volume to 0.32mn equities and 61% in value to QR25.8mn but on 3% jump in deals to 556.
The consumer goods sector’s trade volume plummeted 53% to 1.22mn stocks, value by 42% to QR87.97mn and transactions by 32% to 1,212.
The industrials sector reported 45% shrinkage in trade volume to 2.48mn shares, 35% in value to QR124.22mn and 9% in deals to 2,350.
The banks and financial services sector’s trade volume tanked 40% to 6.67mn equities, value by 32% to QR327.66mn and transactions by 15% to 5,280.
The market witnessed 26% decline in the realty sector’s trade volume to 12.14mn stocks, 26% in value to QR243.81mn and 26% in deals to 2,829.
However, the transport sector’s trade volume soared 60% to 2.03mn shares, value by 62% to QR67.17mn and transactions by 69% to 997.
The telecom sector registered 4% jump in trade volume to 8.08mn equities, 19% in value to QR121.31mn and 5% in deals to 1,345.
In the debt market, there was no trading of treasury bills and government bonds during the week.
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