By Santhosh V Perumal
Business Reporter
Severe selling in services and industrial equities largely extended the bearish run on Qatar’s bourse, which settled 2.55% lower in the week ended Thursday, that also saw oil prices climb over $80 a barrel.
Foreign institutions were mainly instrumental in dragging the 20-stock benchmark down 182 points to 6,953.34 points. Qatar’s economy will grow 9% this fiscal and 16% in 2010, HH the Emir Sheikh Hamad bin Khalifa al-Thani said this week.
Large and small cap equities came under severe selling pressure in the week that also saw Finance Minister HE Yousef Hussein Kamal announcing that corporate taxes on foreign companies in Qatar are to be brought down to 10%, starting next fiscal, as part of measures to attract foreign investments.
A sharp fall on the first and third days largely resulted in the benchmark to settle below the 7,000 mark although it surpassed that level on Wednesday in the review week, which saw Qatar Statistical Authority disclosing that the country’s (nominal) economy had fallen 29.7% year-on-year in the second quarter of this year mainly on hydrocarbons, especially gas, and manufacturing sectors.
Prominent shakers included Commercialbank (Cb), Qatar Islamic Bank, Industries Qatar (IQ), United Development Company, Nakilat, Qatar Shipping, Qatar Electricity and Water, Barwa and Qatar Real Estate Investment in the week that featured a Global Investment House report that the profitability of the GCC petrochemicals sector may see a 5%-5.5% dip in the fourth quarter this year.
However, stocks of Al Meera, which is set to merge Mawashi with it, were up 60% from its listed price in the review week that saw Zad Holdings’ intention to rope in “strategic” partners for it’s yet to be established poultry project, which will also see 30% stake being offered to public through an initial public offering.
Despite the continued weakening, Qatar’s bourse has reported 0.98% gains year-to-date (YTD) with stocks of services and industries rising 8.21% and 6.26%, while those insurance and lenders falling 8.11% and 2.70% respectively.
Maximum selling was seen in services, whose index shrank 3.90%, followed by industry (2.87%), banks and financial institution (1.95%) and insurance (0.87%) in the week that saw Cb announcing that it intends to sell dollar-denominated fixed income bonds in the international markets and to be listed on the London Stock Exchange.
Of the 44 stocks, only 10 gained, while 31 declined and three were unchanged in the week that featured the fertiliser unit of IQ increasing production of urea and related products to supply growing global demand, focusing on South America, and expects 2009 profit to be in the range of QR2.55bn.
Five of the nine lenders, three of the five insurers, six of the seven industries and 17 of the 23 services stocks closed lower in the week that saw HSBC chief economist Simon Williams Barwa saying Qatar, along with Saudi Arabia and Abu Dhabi, will lead the way in economic prosperity in the Gulf region where the recovery is imminent mainly on fiscal policies.
Market capitalisation contracted 1.98% or more than QR6bn to QR321.61bn as small cap equities plunged 2.81%, large cap (2.02%) and mid cap (0.74%), while micro caps gained 1.65% in the week that saw the Qatar Financial Markets Authority “voluntarily” suspending Gulf Investment Group from business.
However, small cap equities have risen 15.42% YTD, micro cap (10.21%), large cap (9.68%) and small cap (2.55%).
The bourse’s price-earning ratio, a measure of expensiveness, was 13.08 times as on November 5 compared with 10.15 times a year ago.
The price-to-book value was 2 times at the first week of November against 2.12 in the previous year period.
Foreign institutions were increasingly into profit-booking as their net selling (in terms of value) surged to 11.61% from 1.62% in the previous week.
A lower 12.02% of them bought equities compared with 17.24% in the week October 29, while a higher 23.63% sold against 18.86%.
Local institutions were however increasingly bullish despite their lower exposure as their net buying rose to 5.90% from 4.56% in the previous week.
A lower 23.44% of them were into buying against 24.99% in the week ended October 29 and a lower 17.54% into selling compared with 20.43%.
Qatari retail investors turned bullish that they were net buyers to the tune of 4.17% against net sellers of 1.66% in the previous week.
A higher 45.88% of them were into buying compared with 41.31% in the week ended October 29, while a lower 41.71% were also into selling against 42.97%.
Non-Qatari individual investors were also bullish that they were net buyers to the extent of 1.54% compared with net sellers of 1.28% in the previous week.
A higher 18.65% of them purchased stocks against 16.46% in the week ended October 29, while a marginally lower 17.11% sold compared with 17.74%.
Total trading volume gained 17% to 58.27mn shares, value by 21% to QR1.69bn and deals by 17% to 32,694.
Services dominated the trading ring as its stocks accounted for 61.23%, 47.93% and 55.55% of total volume, value and transactions respectively.
Banks and financial institutions’ share in total volume was 29.40%, followed by industry (8.37%) and insurance (1%).
Trading volume of industry, insurance, lenders and services expanded 34%, 26%, 17% and 16% to 4.88mn, 0.58mn, 17.13mn and 35.68mn stocks respectively.
In value, after services, banks and financial institutions accounted for 33.73% of the total, followed by industry (16.57%) and insurance (1.78%).
Stock trading value within industry, lenders and insurance rose 65%, 46% and 36% to QR278.62mn, QR577.93mn and QR27.66mn respectively, whereas that within services fell 1% to QR806.94mn.
Mawashi stocks accounted for 17.04% of the total trading value, followed by Cb (12.61%) and IQ (12.38%).
Banks and financial institution’s share in total deals stood at 29.60%, industry’s (13.34%) and insurance’s (1.50%).
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