QSE stock split takes effect today, to attract more retail investors into market
June 08 2019 07:49 PM

Companies listed on the Qatar Stock Exchange will implement stock split from Sunday, beginning with Commercial Bank and Qatar First Bank, a move that ought to attract more retail investors into the market.

The stock split, through which the nominal value of a share will become QR1 instead of the present QR10, is expected to expand the ownership base of listed companies as a result of the entry of new investors, who prefer to trade low-priced stocks.

The banking and financial services sector, which comprises 13 listed constituents, is the first to implement the stock split between June 9 and June 16.

Al khaliji, Dlala Holding and Qatar Oman Investment will implement stock split on June 10; QIIB and Alijarah Holding (June 11); QNB, Ahlibank Qatar and Islamic Holding (June 12); Qatar Islamic Bank and Doha Bank (June 13) and Masraf Al Rayan (June 16).

The consumer goods and services sector, which comprises nine constituents, has the June 17-20 window to implement the stock split.

Al Meera Consumer Goods and Mannai Corporation will implement the stock split on June 17; Widam Food, Zad Holding and Qatari German Company for Medical Devices (June 18); Woqod and Medicare Group (June 19); and Salam International Investment and Qatar Cinema (June 20).

The industrials sector, which consists of nine listed companies, has June 23 to June 26 for the implementation of the stock split.

Mesaieed Petrochemical Holding and Investment Holding will implement the split on June 23; Qatari Investors Group, Aamal Company and National Cement (June 24); Industries Qatar and Qatar Industrial Manufacturing (June 25); and Qatar Electricity and Water and Gulf International Services (June 26).

The insurance sector, which has five constituents, will have a two-day window to implement the stock split, starting from June 27 with Qatar Islamic Insurance and Qatar Insurance and Doha Insurance, followed by Qatar General and Reinsurance and Al Khaleej Takaful (June 30).

The real estate sector's window opens on July 1 and closes the next day. Barwa and Ezdan Holding will have to implement it on July 1 and United Development Company and Mazaya Qatar (July 2).

On July 3, both Ooredoo and Vodafone Qatar have to implement the stock split and on July 4, the transport sector comprising Nakilat, Gulf Warehousing and Milaha will have to do so.

Apart from Doha Bank and Masraf Al Rayan sponsored exchange traded funds QETF and QATR; the newly listed Qatar Aluminium Manufacturing Company will have to implement the stock split on July 7, 2019.

The stock split will result in enhanced free float, thereby increasing liquidity, leaving the paid-up capital intact. Shareholders do not need to take any action because of the stock split, which will not affect the company’s market capitalisation or the proportionate ownership of existing shareholders.

Empirical studies in corporate finance indicate that the stock split is positive and indicates positive future performance, market sources said.

"The proposed move will have an impact on the minds of average investors, who otherwise are waiting in the fringes," an analyst with a leading bank brokerage house said about the stock splits so far announced in the local bourse.

"The stock split will gauge the right intrinsic value as more float will help market forces to determine true price," an analyst with a leading investment firm said.

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