DOHA: Gulf stock markets fell sharply yesterday as panic selling spread across the region after oil dropped to a fresh five-year low. Qatar stocks took a severe beating as the index plummeted 534.55 points, or 4.33 percent, to hit 32-week low of 11,805.32 points at close of trading. Earlier this year on April 1, the QE index had closed at 11,905.94 points.
Indices of all sectors ended in the red zone yesterday.
Real estate index fell the most (-5.22 percent) followed by industries (-4.80 percent), consumer goods (-4.27 percent), telecoms (-4.16 percent), banks and financial services (-3.46 percent), transport (-3.25 percent) and insurance (-2.37 percent). The traded value soared QR720.80m from QR411.35m registered on Wednesday. The traded volume jumped to 13,067,813 shares from 7,964 transactions compared to 7,399,230 shares from 5,281 transactions on Wednesday.
The market capitalisation dropped to QR652.24bn from QR678.33bn registered on Wednesday. From the 43 listed companies, shares of 42 exchanged hands yesterday. From these, 39 went down and two gained while one remained unchanged.
Islamic Holding share gained 1.69 percent when it closed at QR222.70. Industrial Manufacturing Company advanced 1.96 percent to QR46.90.
Gulf International Service was the biggest loser, going down 9.93 percent to QR80.70. Qatar Electricity and Water share dropped 4.79 percent when it closed at QR179.
From the insurance sector, Qatar Islamic Insurance Company dropped 7.93 percent when it closed at QR74.30. From the real estate sector, Barwa share fell 7.66 percent when it closed at QR4.
Elsewhere in the region, Dubai’s main index sank 7.4 percent, its biggest daily loss in six years.
Dubai’s index slid to 3,595 points, breaking major technical support at 3,731 points, the July trough, and hitting its lowest level since January. There is no major chart support left in the vicinity.
Many economists and fund managers think cheap oil will not hurt the big Gulf economies much, since governments have built up huge fiscal reserves which they can use to keep spending high for many years even if they run budget deficits. In contrast to Gulf markets’ 2008 crash, there are few signs of stress on the overall financial system. Credit default swaps are still low, bond yields have not surged, and forwards do not suggest serious pressure on the region’s currency pegs to the US dollar. Real estate markets in Dubai and elsewhere are not plunging, and banks are in good shape around the region.
Other Gulf markets also posted heavy losses. The main index in Abu Dhabi tumbled 4.7 percent, its worst daily performance in five years, in an equally broad sell-off.
Oman’s bourse lost 4.2 percent to 5,808 points, its lowest level since February 2013. The Kuwait index fell 1.5 percent to 6,464 points, while the Bahrain index lost 0.9 percent to 1,391 points.
Saudi Arabia’s stock market, which closes later than others in the Gulf, recovered most of its intra-day losses as oil briefly rebounded to $65. The benchmark, which had dropped 2.5 percent in the previous session and erased all its year-to-date gains, ended 0.2 percent lower.
Egypt’s index dropped 2.2 percent in response to the gloom in the Gulf.QNA/Reuters
