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Shares in Doha Bank, Qatar’s fifth-biggest lender, have dropped 2.6 percent during the month of November, as index compiler MSCI moved the stock its small cap index.
“Doha Bank’s removal from MSCI EM triggered more than QAR300m of selling by index-related investors and has unsurprisingly pressured the stock,” Akber Khan, senior director of asset management at Al Rayan Investment, told Zawya by email.
Index compiler MSCI announced the results of its 2018 semi-annual index review on November 13, which saw Doha Bank removed from the MSCI Qatar Index and moved to a small cap index.
On Thursday, the bank’s shares rebounded to close 1.42 percent higher and helped the Qatar Stock Exchange index close 0.34 percent higher.
The changes in constituents for the MSCI Global Standard Indexes will take place as of the close of business on Friday, November 30, 2018, MSCI's press release revealed.
“In anticipation, active investors sold ahead of the day and many are now buying back today, the day of index exclusion,” Khan added.
For the year, the bank’s shares have dropped close to 26 percent, largely underperforming both Qatar’s stock market, which has gained in value by over 21 percent in 2018, and a Thomson Reuters index of Qatari banks, which has now gained close to 44 percent since January 2018.
The bank had reported a drop in first half (H1) and in nine-month profit figures.
Doha Bank’s H1 net profit amounted to 470.7 million Qatari riyals ($129.3 million) versus 715.5 million riyals for the same period last year.
The bank’s 2018 nine-month net profit amounted to 737.5 million riyals, versus 1.05 billion riyals in the first nine months of 2017.
Elsewhere in the region, Dubai’s index dropped 0.61 percent on Thursday, Abu Dhabi’s index closed 2.27 percent lower, Oman’s index gained 0.37 percent, while Kuwait’s premier market index dropped 0.42 percent and Bahrain’s index added 0.3 percent.
By 15:02 GST, Saudi Arabia’s index was trading mainly flat and Egypt’s blue-chip index was trading 0.18 percent higher.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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© ZAWYA 2018
