(MENAFN- The Peninsula) The changing oil market dynamics is expected to throw up 'surprising' first quarter results for many Qatari companies. The first quarter of this year witnessed sharp slide in the oil prices and this is going to be reflected in the Q1 results.
The oil price drop is expected to put a damper on energy-related companies.
"The oil prices declined most during the end of fourth quarter extending it to the first quarter. The crude was trading about $85 per barrel during the opening of first quarter. Today, the global benchmark Brent was traded at $56 per barrel. This kind of drop and volatility will have a huge impact on the first quarter corporate earnings," a top market watcher told The Peninsula.
"This kind of drop will have more direct profits of the companies whose products are directly linked to the oils chemical companies, but the companies that use oil as energy as a cost will benefit. The Q1 results will gives us exact picture how the earnings have impacted by the oil price slide for the first time. There are big surprises in store," he said.
A series of listed companies are expected to announce their first quarter results during the second week of April. Banking major QNB announced it would disclose its first quarter results on April 8. Gulf Warehousing yesterday announced it will announce its financial results on April 23. Developer UDC is expected to announce its first quarter results on April 26, 2015.
On the Q2, 2015 outlook, another analyst said, the oil price trending is going to be a big direction for Qatari stock market. "If oil stabilises on $60-$70, it's good and we are not expecting any negative impact on the stock market. But again it is very important to be in picking stocks."
The GCC Earnings Review -2014 released yesterday by the "Global Research" noted Qatar ranked third, after UAE , Bahrain and Kuwait, in the growth rate of corporate earnings last year. The UAE has been the best-performing market in the region during 2014, recording a 30.2 percent year-on-year increase, followed by Bahrain' 15.0 percent increase and Kuwait's 7.6 percent growth rate.
QE's corporate earnings rose 6.1 percent year-on-year to $11.9bn during 2014, driven by the banks and financial services and real estate sectors.
Gains in real estate were driven by a more than doubling of earnings of Barwa Real estate, which contributed 50.7 percent to the earnings growth. This was partly due to higher rental earnings and increase in capital gains. UDC rose 93.9 percent and Ezdan grew by 21.4 percent. The increase in Ezdan Real Estate was mainly because of higher operating income ascribed to many new real estate projects and improving productivity.
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