Qatari stocks set for post holiday bounce

(MENAFN- The Peninsula)

By Satish Kanady

DOHA: Qatari stocks are tipped for a post-holiday bounce. Market watchers foresee an extended rally when the trading resumes next week after the long Eid Al Adha holidays beginning tomorrow.

Despite headwinds from oil prices the market is expected to perform well after the holidays on the back of strong fundamentals analysts told .

After the specialist Emerging and Frontier markets investment bank Arqaam announced that the upgrade of Qatar by FTSE would help Qatari market to attract an estimated $1bn to Qatar the local bourse’s benchmark index rose 110.83 points or 0.98 percent to finish at 11465 points yesterday.

The upgrade of Qatari market by FTSE Russel is a reflection of growing investment in Qatar the global index compiler FTSE said yesterday.

“With the news cycle and investor attention dominated by China and the US in recent months investors may have missed the rising relevance of Middle Eastern equity markets on the global stage. The FTSE annual country classification review the global index compiler said in a note sent to yesterday.

“Our annual country classification review is one of the ways FTSE Russel continually evaluates global equity markets for how they are best aligned within our global indexes.

“In recent years investors have justifiably focused on developments in the Chinese equity market but the Middle East is also an area of great interest to our clients based on the growth and falling barriers to entry in the region. Some key factors at play in those markets include increased market capitalisation maturing governance standards and increasing foreign ownership” Mat Lystra senior Research Analyst FTSE Russel said.

With a major presence of dividend-focused stocks Qatar’s benchmark index always move upward during the pre-earnings season. The listed companies are expected to announce their third quarter financial results after the Eid holidays.

Banking major QNB announced that it would disclose the 3rd quarter financial statements in the second week of October. Al Khalij Commercial Bank (al khaliji) announced that its’ financial results for the third quarter will be announced on September 30 2015.

Nick Wilson Chairman of the Qatar-focused fund “Qatar Investment Fund (QIF)” said: “The performance of the Qatar Exchange was strong despite headwinds from lower oil prices and the ending of the effect of the MSCI upgrade which occurred in June last year. Saudi Arabia Kuwait Oman and Bahrain posted negative returns during the period but the Qatar Exchange remained resilient”.

The London Stock Exchange-listed QIF said the Qatari banking sector has a record of strong growth and future growth prospects remain good fuelled by infrastructure expenditure.

In a note sent to the QIF said it invests in companies listed on Qatar Exchange in addition to companies soon to be listed with a possible allocation of up to 15 percent in other listed companies in the rest of the GCC region.

“Qatar was the best performing GCC market over the 12 months rising 6.2 percent despite headwinds from oil prices that nearly halved. Qatar’s inclusion in the MSCI emerging markets index in May 2014 resulted in a strong inflow of foreign funds of $943m in the period” the research note said.