QSE benchmark index inches towards 10,000 mark
(9/12/2018 7:49:00 AM)
As stocks mostly fell around the region yesterday, the Qatar Stock Exchange (QSE) benchmark index extended the rally gaining 0.42 percent to close at 9,931.07 points, after climbing 1.2 percent on Monday.
Stock opened the trading day to give up the ground initially, before inching close to the 10,000 mark, buoyed by gains from Ooredoo and the banking stocks. The bellwether Industries Qatar (IQ) which rose 1.20 percent on Monday, added 0.20 yesterday. Masraf Al Rayan, QIB, and GWC were among other top gainers.
Foreign institutions were the net buyers. Masraf Al Rayan surged 1.74 percent. All the sector indices, except insurance, ended in green territory yesterday. The market cap rose to QR548.5bn. The market is 16.52 percent up year-to-date.
With the second-quarter earnings season almost over, analysts said the market might pause to take a breath. “In July the market was up by 9 percent, I don’t think it’s a healthy rate of growth or sustainable. So you will see a bit of market taking a breath while fundamentals of lot of companies have improved over the last 12 months”, said Akber Khan of Al Rayan Investment.
Petrochemical fortunes and profitability have been improved very strongly. Industries Qatar represents almost 15 percent of the stock market and the banking sector represents 45 percent.
Banks in general are beneficiaries of rising interest rate environment horizon in the US. That hasn’t been completely filtered through to Qatar, because of different choices, but in general interest rate hikes benefits stocks in Qatar, said another top market watcher.
According SICO analysts, petrochemicals’ median product price for a basket of major products remained higher 16 percent YoY in August. Spot prices for petrochemicals during August exhibited an uptrend on YoY. Ethylene was up 18.9 percent and propylene prices rose by 25.2 percent as the prices of HDPE increased by 15.7 percent. Urea was up by 35.3 percent YoY.
The QSE has urged foreign companies to take advantage of the changed investment scenario in the country, especially in view of the country opening up the market to the foreign investors. The potential benefits of the new foreign investment rules include provisions for foreign investors to invest in banks and insurance through a decision of the cabinet, exemption from income tax and customs duties and that foreign investments are not subject to expropriation, according to Ernst and Young.
The Ministry of Economy and Commerce (MEC) had stated that the revision to the existing laws is meant to attract foreign capital in all sectors of the national economy.
The changes would also facilitate investors’ entry into the market and increase confidence in investment security.