Qatar stocks benchmark index surged 1.64 percent, the highest single day rise in four months, on the second trading day of the New Year yesterday. Driven by banks, the index gained 171.23 points to finish at 10,5999.95.
The banking stocks rose across the board with Commercial Bank gaining the most by 3.46 percent. The extraordinary general assembly of Commercial Bank, held in November 2016, had given the nod to the bank to increase its share capital, by offering new ordinary shares. The subscription period will start on Sunday.
QNB jumped 2.47 percent, while Masraf Al Rayan gained 2.53 percent. UDC and Gulf International increased by 2.53 percent and 2.71 percent, respectively. Vodafone Qatar was the most active stock in terms of trading volume.
Stock markets in the Middle East gained yesterday, with those most exposed to international funds outperforming as global equities and crude oil prices firmed on their first full-scale trading day of 2017. Some investors in Qatar tend to rotate into Qatari stocks in the early part of the year to capture high annual dividend yields, Reuters reported.
Analysts told The Peninsula that GCC banks are expected to report a modest core earnings performance in 4Q16. Declining interbank rate would stabilise funding cost and support Saudi banks NIMs, in contrast to UAE banks who are likely to witness NIM pressure on rising competition. "We expect to see provisioning charges continue to rise for Qatari banks, from their construction sector exposure.”, analysts at SICO said.
Lower provisioning charges will help to offset weaker non-interest income of Doha Bank. On QIB’s performance the analysts said the bank’s strong balance sheet growth is to continue, however they expect NIM to contract and provisioning charges to rise YoY. On a Quarter-on-quarter basis QNB’s higher provisions is expected to offset net interest income.
According to KAMCO Research, the corporate earnings are expected to continue to remain a primary support for listed companies in the GCC in 2017, whereas oil prices are expected to remain range bound between $50 -60/b. Project execution in the GCC is expected to improve as compared to 2016 as the pipeline continues to remain strong. KAMCO expects government policy changes would be positive for the stock markets
