DOHA: Qatari stocks down yesterday as fund managers predicted declines in first quarter GCC corporate earnings due to oil slump. Qatar Exchange’s (QE) benchmark index declined 1.45 percent in a broad sell-off to settle at 11,503 points. Of the 39 traded stocks, 29 declined.
The entire sector indices ended red with the banks and financial services declining the most by 2.09 percent. The QE index drop was mainly led by QNB and Industries Qatar (IQ) falling. The banking major QNB fell 2.02 percent as IQ declined 2.18 percent.
A section of market watchers said the instability in Yemen is also having a negative impact on the regional stock market. “Whilst events in Yemen are somewhat impacting regional markets, we remain of the view that the recent selloff in equities is mainly driven by high stock valuations, especially when considering current volatility in oil prices”, said a top analyst.
“Brent dropped 45 percent over the past six months, however regional stocks declined only by 15 percent, mainly because investors continue to believe that oil price will eventually recover back to $70. The volatility is affecting both business as well as investor sentiment, and when coupled with political instability such as the recent events in Yemen, it is inevitable that some investors will prefer taking profits and cautiously observe from the sidelines until thinks calm down,” Afa Boran, Head of Asset Management, Amwal said.
“Like Syria, Libya, and Egypt, Yemen in our view is an isolated event which is unlikely to have any material impacting on GCC markets in the medium term. We continue, however, to stay close to the Iranian developments as a permanent solution will most likely have an impact on regional oil prices as well as regional equities, and we think this presents risks and buying opportunities at the same time, and of course, key to success is always being very selective and evaluating stock fundamentals,” he said. The Peninsula
