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Bullish Qatari bourse gains 83 points

DOHA: The Qatari bourse continued its bullish run yesterday with strong backup from foreign institutional investors whose net buying was quite high as usual.

The main index of Qatar Exchange (QE) jumped more than 83 points, or a little more than one percent, to 8,273 at the close of trading yesterday -- a level close to October 14, 2008 record mark of 8,377.36 when there was a sudden and surprising 733 points jump due to the government's announcement that it would prop the local banks against risks lurking from the onset of the global recession.

Industries Qatar (IQ) rose 2.3 percent to a 25-month high. IQ is up 28 percent in the past three months, while the benchmark has gained 19 percent this year as Qatar's bullish macroeconomic outlook bolsters shares.

"Valuations are attractive and earnings have surprised on the upside and were well ahead of other regional markets - the country's economic growth is translating into solid corporate growth," said Fahd Iqbal, EFG Hermes strategist.

"Our only concern is relatively low number of listed companies, while for foreign investors it's always a bit tight because of ownership restrictions."

Qatar National Bank rose 0.4 percent and Commercial Bank of Qatar (CBQ) added 1.5 percent, with the latter lender among EFG-Hermes top 20 stocks for the Middle East and North Africa.

"CBQ and QNB are both attractive, but there's a significant discrepancy in valuations in favour of CBQ," added EFG's Iqbal.

Meanwhile, Kuwait's Wataniya hit a two-year high yesterday after its consortium bought the remaining half of Orascom Telecom's Tunisian unit in a $1.2bn deal.

Wataniya, also known as National Mobile Telecommunications and a unit of Qatar Telecom (Qtel), climbed 2.1 percent, while Qtel edged up 0.05 percent after the deal was announced.

"The deal's valuation for Tunisiana was in line with estimates, so I don't think this will have much impact on the overall valuation of Wataniya," said Martin Mabbutt, Nomura telecoms analyst. "Wataniya's share price move has little to do with this deal and more about the stock being undervalued." Orascom Telecom fell 0.9 percent after being up as much as five percent intraday.

Saudi Arabia's index ended almost flat at 6,363 points, with petrochemical gains cancelled out by weak bank stocks. Samba Financial Group dropped 2.9 percent and Banque Saudi Fransi lost 0.7 percent. "Bank provisions have increased dramatically this year and the sector is too large for the market to move without it," said Youssef Kassantini, an independent financial analyst. "Banks will continue to take higher provisions and that will affect profitability."

He forecast the index would test 7,000 points before year-end, with gains limited by bank provisions. Dubai's benchmark climbed 0.5 percent, bolstered by Emaar Properties' 1.4 percent rise, but volumes were again lacklustre.

"Focus for dedicated Mena investors remains in Egypt, Qatar and Saudi," said Julian Bruce, EFG-Hermes director of institutional equity sales. "UAE remains overlooked due to absence of any positive catalyst. Investors are unwilling to commit fresh funds now we're approaching year end and there is still an air of caution whilst we await any further developments on Dubai Holding's debt restructuring."

© The Peninsula 2010