Satish Kanady: Investors in Qatar remained bullish on the opening month of the new year, as the Qatar Stock Exchange (QSE) benchmark index closed 1.54 percent up to finish at 10,599.22 for January yesterday, but shed 1.40 percent on the last trading day. Foreign investors were the net sellers of shares yesterday, a bourse data showed.
The January performance marked a gear change from the strong gains racked up in the previous month, when the index gained 6.56 percent.
Trading value during January increased by 6.97 percent to QR5.7bn. Trading volume increased by 1.64 percent to over 189millios shares on month-on-month as the number of total transactions rose by 8.89, to reach 76,729 transactions as compared to 70,464 transactions in December 2016. The banks and financial services led trading value in January, accounting for 33.57 percent of the total trading value.
Real estate sector, with a share of 32.28 percent, led the volume, followed by Banks and Financial Services in January.
Yesterday, six out of seven sectors closed in the red. The market experienced pressured as heavyweights Industries Qatar and QNB fell. Ezdan Holding led the trading activity with a volume of 2.9 million shares at QR43.61m.
The weakness witnessed in global equities and softening oil prices weighed on regional equities, taking a breather from the strong performance seen during the month of January, analysts said. Stock markets in the Middle East fell (on Tuesday) as the travel curbs ordered by US President Donald Trump hit sentiment towards equities globally. Middle Eastern bourses most exposed to foreign fund flows underperformed the region, agencies reported.
“We keep our underweight stance, as the market is likely to see a correction once its upgrade to FTSE Secondary Emerging Market status is completed in March… Beyond the March implementation date, we continue to house concerns over Qatar’s valuations and overall growth outlook”, Credit Suisse said in a note sent to The Peninsula early this week.
“A lot of pain points are expected to continue in 2017 as well since the factors underpinning the economic growth in these countries are not expected to change by a huge margin barring a surprise from the oil market. Qatar Kuwait and UAE are marginally better than as their foreign reserves, fiscal and current account balance continue to be in a better shape than others”, ‘Markaz’ noted in its GCC stock market outlook for 2017.
Fund managers believe that in the worst case, flows of US trade, aid and investment could be hit by Trump's policies. Companies favoured by foreign funds were hit hard yesterday with investment firm EFG Hermes down 5.4 percent, Reuters reported.
