DOHA: Qatar stocks tanked yesterday on regional cues. As investors reacted to Iraq conflicts, the bourse’s market cap tumbled by QR9bn in a single day. Total traded value plunged to QR441m from QR610bn. Traded volume dropped to 9 million shares from the previous session’s 12 million.
The bourse’s main index dropped 1.58 percent to 12,773 points with all the sector indices ending in red. Banking sector was the worst affected with all the stocks edging down yesterday. Bellwether QNB lost 2.59 percent, QIB fell by 2.54 percent. Rayan slipped 1.30 percent and International Islamic was down by 0.95 percent.
Of the sector indices, telecoms dropped the most by 2.40 percent. As Ooredoo shed 2.37 percent, Vodafone slipped 2.49 percent. Transportation sector lost 1.64 percent with the Nakilat slipping the most by 3.30 percent.
Shares in the Gulf companies with major exposure to Iraq were also hit. Ooredoo, one of whose units is Iraq’s second-biggest mobile telecommunications operator Asiacell , which provides a fifth of its total revenue, dropped 2.4 percent. It was among the main drags on the Doha bourse, which fell 1.6 percent.
The Baghdad-listed shares of Asiacell, which made a net profit of Dh581bn ($499m) in 2013, have plunged 25 percent in June.
Zain Kuwait, another major telecommunications firm with operations in Iraq, was down 1.5 percent while Kuwait’s index fell 1.4 percent.
Last year, Zain’s unit in Iraq accounted for 41 percent of its total revenue.
All markets in the Gulf declined yesterday as investors reacted to insurgent advances in Iraq and Dubai builder Arabtec Holding plunged again, after a technical glitch led investors to believe a major shareholder was cutting its stake further.
Nevertheless, the news from Iraq encouraged some foreign institutions to take profits —something they were already contemplating after gains in regional markets this year — while further dampening the appetite of some local retail investors to buy for now. “For many institutional traders from abroad, it’s a concern,” Fouad Darwish, head of brokerage services at Global Investment House in Kuwait, said of Iraq. Meanwhile, local retail investors are “having second thoughts about buying”, he added.
In Abu Dhabi, Dana Gas, which has operations in Iraqi Kurdistan, sank 4.8 percent while the bourse index slid 2 percent, although the company said after the close that its facilities in Iraq had not been affected.
“There are very few corporates in the region which have exposure to Iraq, such as Ooredoo and Zain Kuwait,” said Sebastien Henin, head of asset management at The National Investor in Abu Dhabi. “We should expect these to be under pressure in the coming days.”
Even markets with minimal links to Iraq were dampened yesterday; Saudi Arabia and Egypt fell 1.1 percent each. “The risk premium for the region has gone up,” said Henin.
Dubai’s benchmark tumbled 4.7 percent, its biggest loss in almost four weeks, as most stocks declined.
The Peninsula/Reuters
