Shares in Qatar Aluminium Manufacturing Company (QAMCO) dropped 4.69 percent on Monday, after rising 29 percent on the company's first day of trading on Sunday.

The initial public offering (IPO) price for the shares was 10.10 Qatari riyals ($2.77). On Sunday, the stock ended the day at 13.01 Qatari riyals after briefly trading at 18 riyals after the market opened. It closed at 12.40 Qatari riyals on Monday.

State-owned Qatar Petroleum on October 22 announced its plan to list 49 percent of its shares in its subsidiary, QAMCO, and the IPO closed for subscription on November 12. The offer was open only to individual Qatari investors and was 2.5-times oversubscribed.

“The surge on the first day was less about fundamentals and more about the triumph of pre-IPO hype. That said, the fast-track entry to FTSE EM (emerging markets) will bring in significant passive buying this Thursday," Akber Khan, head of asset management at Al Rayan Investment in Doha, told Zawya by email.

Index compiler FTSE Russel said earlier in December that if QAMCO shares met a given threshold at the end of their first day of trading, it would include them into its emerging markets index following a scheduled review, with trading in the updated index due to begin on Monday 24 December, 2018.

One of the current thresholds for FTSE Middle East & Africa shares to be fast-tracked into the index is for the stock to have a market capitalisation of at least $1.542 billion, which QAMCO exceeded at the end of its first day's trading, data from the Qatari exchange showed.

“While closing up 30 percent, QAMCO accounted for an eye-watering two-thirds of the QSE’s (Qatar Stock Exchange) value traded yesterday, underlining the success of this listing,” Khan said.

QAMCO was the most-traded stock on the exchange both on Sunday and Monday, grabbing 65 percent of the exchange's traded volume on Monday and more than two-thirds of the traded volume on Sunday.

Qatar’s stock market index closed mainly flat on Monday, while the index was boosted by the jump in QAMCO’s shares on Sunday to close 0.39 percent higher.

“QAMCO’s debut on the exchange definitely drove the index higher in its first trading day, as the stock was up 30 percent, and dominated trading activity in terms of both of traded volumes and value traded,” Faisal Hasan, chief business development officer at KAMCO Investment Company, told Zawya by email.

“Next triggers for the stock will definitely be higher foreign investor participation and inclusion into the list of index compilers such as FTSE etc,” he added.

Hasan also said that the Qatari market is the best-performing GCC market since the start of the year, gaining over 20 percent “driven by large cap outperformance mainly, even as the economy remained resilient”.

“Having said that, large caps such as Qatar National Bank and Qatar Islamic Bank are up over 50 percent YTD (year-to-date), and now the risk-reward of entering these names look at best balanced, with more downside bias, based on valuation parameters,” Hasan added.

Elsewhere in the region, Dubai’s index closed 0.28 percent higher on Monday, Abu Dhabi’s index gained 0.72 percent, Bahrain and Kuwait’s indices were mainly flat, while Oman’s index dropped 0.2 percent.

By 15:07 GST, Egypt’s blue-chip index EGX 30 was trading 1.66 percent higher and Saudi Arabia’s index was trading 0.7 percent higher.

(Reporting by Gerard Aoun; Editing by Shane McGinley)

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