DOHA: The Qatari government’s decision to raise foreign ownership limit (FOL) of the listed companies to 49 percent from 25 percent boosted the buying interests of foreign institutional investors in May 2014. The hike in FOL will not only help attract the estimated $440m foreign fund but increase the weight of the index from 0.47 percent to 0.62 percent, higher than 0.58 percent in the UAE, in MSCI Emerging Market Index in the near future, a GCC monthly market performance report noted yesterday.
The Qatar Exchange’s (QE)plan to introduce a three-tier investor system (Qatari, GCC and foreign investors) as against the present two-tier system of Qatari and non-Qatari investors, boosted investor sentiment during the month. The bourse’s plans to start margin trading and covered short selling in coming days will improve liquidity, investment options and diversify the market.
The Global Investment House’s (GIH) “GCC Markets Performance Report - May 2014” noted that most GCC indices surged in May due to investor optimism. Five markets advanced with the QE gaining 8 percent (MoM) being the best performer, followed by Abu Dhabi’s ADX Index and Saudi Arabia’s Tadawul All Share Index (TASI).
The combined market capitalisation of GCC bourses increased 1.9 percent MoM to $1,118.1bn in May. All indices, except Kuwait, witnessed a rise in market capitalisation during the month. With $203.4bn, Qatar was the third biggest contributor.
“The QE index continued its strong upward trend, advancing 8 percent MoM in May. The index remained in the tight range in the first three weeks of the month, but surged 8 percent in the last six trading sessions. QE reached a new lifetime high of 13,910 point and managed to close at an all-time high of 13,694 point. The rally was driven by inclusion of 10 stocks in the MSCI Emerging Market Index, strong Q1, 14 corporate earnings announced in April, and improving macroeconomic fundamentals”.
Trading on QE was mixed in May. The total value traded rose 2 percent MoM to $7bn from $6.9bn in April. The total volume of shares traded fell 22.6 percent to 562.1m from 725.9m in April. Overall, trading in GCC markets also remained mixed during the month. The volume traded declined 21 percent MoM, with all markets, except Bahrain and Saudi Arabia, registering MoM growth.
The Peninsula
