Doha/Dubai: Qatar's benchmark Index closed up 1 percent helped by jump in shares of petrochemical producer Industries Qatar. Most stock markets in the Gulf rose yesterday as investors cheered a rally in crude oil prices, while foreign buyers continued to support Egypt’s index.
Qatar Stock Exchange (QSE) index gained 96.52 points after the bourse closed trading at 10,010.27 points yesterday.
From the 44 companies listed on QSE, shares of 42 saw trading yesterday. From these 29 gained and 10 companies closed lower, three remained unchanged.
Meanwhile, indices of six sectors ended in green while one sector index ended red.
QSE Total Return Index increased 0.95 perecent to 16,195.95 points. QSE Al Rayan Islamic Index gained 1.26 percent to 3,709.09 points and QSE All Share Index added to 0.86 percent to 2,753.98 points.
Brent crude futures ended their best week in at least five years on Friday, settling at $54.46 a barrel following Opec’s (Organization of the Petroleum Exporting Countries) agreement to cut output to prop up prices.
Saudi Arabia’s general market index added 0.5 percent in heavy trade, taking its gains for the year to 3.2 percent. The index was down as much as 21.6 percent only nine weeks ago as the economy struggled with low oil prices.
But a string of positive events over the last several weeks - principally the government’s $17.5bn international bond sale, its promise to settle delayed payments to the private sector, and the Opec decision - has unleashed a wave of buying by institutional funds.
The latest report by the Saudi exchange showed institutional funds were net buyers of Saudi shares by a large margin last month, while retail investors, who often account for roughly 90 percent of activity, were net sellers.
Yesterday’s session was volatile in some sectors. Most petrochemical shares lost steam as investors booked profits, turning their focus to year-end earnings after factoring in the oil price rally.
“Now that there has been price discovery in crude markets following the Opec deal, investors will be focusing on the quality names and those producers that can still offer attractive value at current prices,” said a Jeddah-based portfolio manager.
After a strong rally in recent weeks, many petrochemical producers are now in line with what analysts estimate to be fair value. Yanbu National Petrochemical, for example, closed down 1 percent yesterday at 51 riyals; analysts’ average fair value estimate, according to Thomson Reuters data, is 49.73 riyals.
Second- and third-tier stocks favoured by local day traders outperformed. Saudi United Cooperative Insurance soared its 10 percent daily limit and Herfy Food Services jumped 5 percent.
The stock index in Dubai, which was closed for a public holiday on Thursday, gained 1.7 percent in heavy trade. Blue chips Emaar Properties and Dubai Islamic Bank each climbed 3.1 percent.
In Abu Dhabi, Abu Dhabi National Energy surged 10 percent on the back of strong oil prices and Union National Bank added 1.3 percent.
But Abu Dhabi’s index was dragged 1.1 percent lower by telecommunications heavyweight Etisalat, which pulled back 3.5 percent. Funds may be exiting the stock, which is seen as a defensive investment, to enter oil-related shares and the bullish Saudi Arabian market.
In Egypt, the index of the 30 most liquid shares added 0.7 percent as foreign buyers remained net purchasers of stocks by a small margin of $1m, bourse data showed.
Foreign funds, which have been underweight in the Egyptian stock market compared to other emerging markets, have been net buyers since authorities floated the local currency on November 3.
Industrial companies seen as most likely to benefit from improved access to hard currency after the float were among top gainers yesterday, with GB Auto jumping 11.3 percent and Ezz Steel adding 5.2 percent.
Orascom Telecom Media, the most heavily traded stock, sank 5.3 percent after saying it was closing its Orabank affiliate in North Korea because of the complexity of complying with US sanctions on that country.
Orascom said its associate Koryolink would continue telecommunications operations in North Korea while complying with the sanctions.
