Qatar stock market breaks 10,000 mark on earnings optimism
(10/11/2018 8:07:00 AM)
Qatar Stock Exchange (QSE) yesterday notched its biggest point gains since August, as investors expected a strong earnings season and continued growth momentum.
The benchmark index rose 1.26 percent to break the 10,000 mark barrier before settling at 9,964.37, mainly driven by banks and Industrials.
Yesterday’s big gains came as the banking major QNB announced it recorded a QR10.8bn in net profit for the first nine months of 2018, up 6 percent from a year ago. QNB stated that despite the Turkish Lira devaluation impact, the bank’s strong asset liability management capabilities helped QNB Group to improve its loans to deposits ratio to 98.3 percent.
“Investor optimism for a number of blue-chips ahead of Q3 results, amid a steadily rising oil prices, has buoyed sentiment,” Akber Khan, Senior Director, Asset Management Group, Al Rayan Investment, told The Peninsula.
“Market is expecting a solid third quarter earnings. QNB’s 6 percent growth is a pointer. We think the trend will continue”, commented Talal Samhouri, Head of Asset Management, Amwal.
Analysts at QNBFS noted yesterday that they expect third quarter earnings for Qatari stocks under coverage to exhibit strong performance of 27 percent year-on-year growth and 4.6 percent rise on quarter-on-quarter due to base effect for banks.
Industries Qatar, Commercial Bank and Vodafone are estimated to contribute positively YoY to the aggregate bottom-line of stocks under coverage. QNBFS expects Commercial Bank to report strong earnings in 3Q2018 as the bank has made a successful turnaround and significantly lowered provisions while trimming opex.
On Monday, SICO said its GCC equities consensus analysts’ estimated Qatari firms aggregate net profit for Q3, 2018 is expected to grow 21 percent year-on-year, primarily driven by Industries Qatar (IQ).
On QSE, the banking sector rose 1.48 percent with QNB rising 2.21 percent. QIB gained 1.08 percent as Masraf Al Rayan added 1.05 percent. Industrials stocks advanced 1.40 percent, with bellwether Industries Qatar (IQ) rising the most by 2.33 percent.
All the sector indices ended green. QSE Total Return Index increased 1.26 percent to 17,556.12 points and Al Rayan Islamic Index gained 1.03 percent to 3,842.57 points. QSE All Share Index gained 1.25 percent to 2,932.63 points. QSE’s market cap rose to QR555bn.
KAMCO Research’s latest technical analysis on QSE noted the next overhead level of QSE benchmark would come at 10,165 point, while above this will most likely to shift the trading range to 10,165 point to 11,100 point.
“On the negative side, there could be some selling activity on short-term period, knowing that a fall below 9,750 point would lead to 9,450 point but only below this will delay the upward move and trigger the psychological level at 9,000 point once again,” analysts said.