Santhosh V Perumal
Ezdan’s proposed delisting and rating downgrade of certain underlying companies had negatively influenced sentiments on the Qatar Stock Exchange (QSE), which remained under 10,000 levels this week. It was the worst performer among the Gulf bourses.
Foreign institutions’ substantially strong profit booking led the 20-stock Qatar Index shrink 1.2% this week which saw Ezdan Holding Group been temporarily removed from the indices and its weight proportionately redistributed to the remaining constituents of Qatar Index and Al Rayan Islamic Index.
Kuwait bourse gained 1.88%, Bahrain (0.77%), Dubai (0.74%) and Muscat (0.6%); while Abu Dhabi and Saudi Arabia fell 0.84% and 0.12% respectively this week which saw Ooredoo plan to delist its global depositary receipts from London Stock Exchange from August 31; even as its equities will remain listed both on the Qatar and Abu Dhabi bourses.
QSE’s year-to-date (YTD) losses were at 4.76% against 6.01% in Muscat, 5.07% in Dubai, 4.81% in Saudi Arabia and 1.49% in Abu Dhabi; whereas Kuwait and Bahrain added 18.53% and 8.51% respectively.
Selling pressure was seen more within realty, insurance, telecom and industrials on the QSE this week which saw Franklin Templeton bet on banks, logistics and building material companies on improved macroeconomic outlook of Qatar.
Selling was skewed towards mid and small cap scrips on the QSE this week which saw global rating agency Standard and Poor’s view that the Gulf banks will have to set aside additional provisions equivalent to 17% of net operating income on average following the adoption of ‘IFRS 9’ standard from January 2018.
Islamic stocks were seen declining slower than the main index and other indices this week which witnessed AM Best find that the proposed value added tax in the Gulf Cooperation Council from next year is expected to hit the insurance sector, impacting the cash flows and expense ratio.
However, domestic institutions were increasingly net buyers and there was lower net selling by local and non-Qatari individual investors this week which saw Qatar’s April producer price index decline 1.6% on a monthly basis.
Overall trade turnover and volumes were on the rise this week, which saw banking, realty and telecom sectors accounted for about 89% of the volumes.
The banks and financial services sector accounted for 42% of the total volume, realty (28%), telecom (19%), transport (5%), industrials (3%), consumer goods (2%) and insurance (1%) this week which saw Qatar First Bank, Ezdan and Masraf Al Rayan dominate the trading ring in volume and value.
The banks and financial services’ share in total trade turnover was 48%, real estate (16%), industrials (11%), telecom (10%), transport (9%), consumer goods (4%) and insurance (3%) this week which saw more than 74% of the traded stocks in the red.
Opening the week strong at 10,123 points, the market was then on a selling mode for the next three days to touch a low of 9,901 points but rebounded on the last day to overall settled 121 points lower this week which saw no trading of treasury bills and sovereign bonds.
The 20-stock Total Return Index fell 1.2%, All Share Index 2.33% and Al Rayan Islamic Index 0.52% this week, which witnessed six of the seven sectors under selling pressure.
The realty sector index plummeted 10.92%, insurance (3.36%), telecom (2.7%), industrials (1.58%), transport (1.2%) and consumer goods (0.41%); whereas banks and financial services gained 0.28% this week which saw global credit rating agency Moody's affirm 'Aa3' long term deposit rating of QNB and change the outlook to "stable" from "negative".
Market capitalisation eroded more than QR10bn or 1.88% to QR530.71bn as mid, small, micro and large cap stocks melted 2.08%, 1.14%, 0.97% and 0.49% respectively this week.
Mid, small, micro and large cap equities’ YTD losses were seen at 14.1%, 6.65%, 3.86% and 2.15% respectively.
Major losers included Ezdan, Qatar General Insurance and Reinsurance, Qatari Investors Group, Qatar Insurance, Nakilat, Industries Qatar, Ooredoo, Qatar Electricity and Water, Vodafone Qatar, Ahli Bank, Qatari German Company for Medical Devices and Medicare Group this week.
Nevertheless, Barwa, Commercial Bank, Qatar Islamic Bank, Doha Bank, Masraf Al Rayan and Milaha were among the gainers this week.
Non-Qatari institutions’ net selling increased substantially to QR195.48mn compared to QR17.19mn the previous week.
However, domestic institutions’ net buying strengthened considerably to QR214.35mn against QR100.02mn the week ended May 25.
Local individual investors’ net profit booking weakened influentially to QR5.07mn compared to QR62.16mn the week ago.
Non-Qatari individual investors’ net selling also declined to QR13.79mn against QR20.8mn the previous week.
Total trade volume rose 30% to 61.83mn shares, value by 27% to QR1.59bn and transactions by 15% to 16,995 this week.
The market witnessed 92% surge in the transport sector’s trade volume to 3.25mn equities, 84% in value to QR142.31mn and 18% in deals to 1,318.
The insurance sector’s trade volume soared 72% to 0.79mn stocks, value by 77% to QR53.98mn and transactions by 87% to 576.
There was 60% increase in the real estate sector’s trade volume to 17.07mn shares and 15% in value to QR249.4mn on more than doubled deals to 4,584.
The banks and financial services sector’s trade volume shot up 21% to 25.97mn equities and value by 30% to QR755.78mn, while transactions shrank 13% to 6,063.
The telecom sector reported 13% expansion in trade volume to 11.68mn stocks, 15% in value to QR156.95mn and 13% in deals to 1,723.
The industrials sector’s trade volume gained 8% to 2.1mn shares and value by 27% to QR169.64mn, whereas transactions were down 3% to 1,701.
The consumer goods sector saw 2% jump in trade volume to 0.97mn equities but on 16% fall in value to QR57.37mn and 8% in deals to 1,030.
© Gulf Times 2017
