DOHA: Driven by massive planned government spending and attractive valuations, investment funds are becoming much more bullish on Qatari stocks.
Citing Reuters' monthly survey on the region, Qatar Exchange yesterday noted that 56 percent of 16 leading investment managers expect to raise allocations to Qatari equities in the next three months. That was the biggest positive change among the six major markets in the survey, and compared with 20 percent saying they would raise allocations to Qatari stocks in December's survey.
Abu Dhabi Investment Company (AD Invest) and Kuwait headquartered Global Investment House (GIH) recently noted that Qatari stocks will remain bullish aided by a significant government tailwind and huge fund inflows.
Reuters quoted Afa Boran, head of asset management at Amwal Qatar, as saying: "Qatar has better near-term growth prospects than any other regional market. The government has a significant budget for infrastructure spending which we expect will be largely spent over the next three to five years,".
He estimated both the Qatar and Saudi markets were trading at about 12 times estimated corporate earnings for 2014, with Qatar having better near-term earnings prospects. Earnings growth in Saudi Arabia is currently being dampened by a crackdown on illegal foreign labour that has raised companies' costs, analysts say.
GIH in its latest GCC equity strategic analysis noted Qatar's banks, telecoms and industrials are best stock picks for 2014.
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