(MENAFN- The Peninsula) A combination of oil price slides, projected weak quarterly earnings and geopolitical tensions pushed Qatari stocks down 4.78 percent or 601.9points in the first quarter of 2015, from a year ago.
The market settled at 11,711 before closing the first quarter of the year yesterday, down 4.68 percent from the previous quarter. As for the month of March, the main index tumbled 5.90 percent compared to February 2015, with telecoms losing the most by 6.88 percent. However, the market extended its rally for the third straight session yesterday, lifting the index by 1.08 percent or 124.57 points.
Last week, analysts said Qatar's benchmark index might test 11,950 and 12,100 levels if it sustains above 11,700. On the downside, it could find a support at 11,480 and 11,400. On the investing strategy, they noted long-term investors could remain in the market as long as the index closes above 10,250.
Market capitalisation was squeezed by QR43bn to QR633bn from the previous quarter. Business and financial portal "Mubasher" quoted Ahmed Maher, financial analyst at Enmaa Financial Services, as saying: "QE negative performance during the first quarter of 2015 was affected by many factors including the plunge in oil prices, geopolitical events and cash dividends. The cash dividends led to a huge decline in stocks, thus pressuring the index to break the important support levels in the past period".
During the Q1, 2105 the real estate sector topped gainers by 6.74 percent due to a rise in Barwa Real Estate and Ezdan Holding Company by 13.60 percent and 4.56 percent respectively.
Meanwhile, the telecom sector led decliners by 10.73 percent in the same period, weighed by Ooredoo which lost 16.85 percent. However, Vodafone Qatar gained 8.39 percent.
End of dividend distributions and return of strong liquidity to blue chips pushed the market higher, Maher said.The analyst expected the market to recover in the second quarter of 2015 unless unexpected political events take place.
Barring Insurance sector, the entire sector indices plunged in March. Among the banking stocks, Commercial Bank was battered by 20.29 percent and Doha Bank plunged 13.43 percent. Bellwether Industries Qatar (IQ) tumbled 10.32 percent and Ooredoo lost 12.93 percent. Developer UDC crashed 13.06 percent.
Reuters' monthly survey of Asset Managers released yesterday showed the Middle East fund managers may move further into cash as economic and geopolitical risks in the region rise.
The survey of 15 leading fund firms, conducted over the past 10 days, shows just 13 percent expect to raise their equity allocations to the Middle East in the next three months, down from 27 percent in the previous survey. The proportion intending to cut equity allocations is up to 20 percent from 13 percent.
On the possible equity allocations to Qatar in the next three months one fund manager said he/she will increase the allocation to Qatar, while four said they will decrease and 10 said they will "keep the same".
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