By Satish Kanady
DOHA: A fresh wave of profit taking pushed Qatari stocks down to almost one year low yesterday. On the oil-triggered panic selling, the benchmark index tumbled 5.85 percent close to January 13 levels and the biggest one day loss in 70 months. The bourse’s main index plummeted to 10,900 during intraday before settling at 11,114 points.
The entire 43 stocks got battered and the banking and Industrials stocks, two sectors which have maximum weightage in the index, tanked 5.6 percent each. International Islamic was hammered by 10 percent. QIB and Doha Bank plunged by 7.47 percent and 7.71 percent, respectively. Property developer Ezdan was down by 10 percent. A whopping QR64bn evaporated from the market within a span of three days, as the market cap plummeted to QR614bn from Wednesday’s QR678bn.
The slump in oil prices continues to send jitters among traders. Oil price drop has dampened the near term sentiment, analysts told The Peninsula. Six months back, stocks were valued on the assumption that oil at $110 per barrel was normal, and now $60 per barrel seems to be the new normal. Both positions as extreme and the market’s drop yesterday as excessive for many Qatari stocks, a top market commentator said.
Global equity markets being down around 4-7 percent last week alongside the oil price drop has dampened near term sentiment. Another reason for the market drop is the high stock valuations, commented Afa Boran, head of Asset Management, Amwal. “ We have particularly been cautioning investors about certain overvalued stocks in Qatar, which are now dropping more than others. For instance GIS is down 40 percent since the mid-September market peak, while Vodafone is down 33 percent and Masraf Al Rayan down 28 percent. Overall market is down 21 percent during the same period and QNB is down only 11 percent.”
While oil price is key for the region’s economies and corporate earnings, we believe we are witnessing a window of finding “cheap” stocks. As most stocks are down, some firms will see lower profits and others will not be as affected, hence the recent fall in stock prices makes them more attractive in the long run.
“Predicting the near-term outlook for oil may not be possible, but our analysis of the price is less bearish than current levels,” Afa said.
Yesterday’s turnover declined to QR957m compared with QR1.3bn in the previous session, while total traded volume rose to 22 million shares from 13 million. Market is up 7.08 percent up year-to-date.The Peninsula
