DUBAI: Qatar’s shares fell to a two-week low yesterday and are seen facing further pressure ahead of a planned listing, while most other regional bourses traded in a tight intraday range as investors await further catalysts following big market gains this year.
Doha’s benchmark fell one percent to its lowest since September 11. The measure has lost 2.8 percent this week on expectations state-run energy firm Qatar Petroleum will launch an initial public offering for its unit.
QP has picked two banks to help arrange the IPO, an issue which could be worth around QR3.2bn ($880m), banking sources said. The IPO may launch by the end of this year.
“Local retail and institutional investors are selling for the IPO but foreigners are gradually accumulating,” said Ahmed Shehada, head of trading at QNB Financial Services. “There is a lot of value in the market and with Q3 reporting soon, expect most names to have positive earnings.”
Companies in Qatar will begin announcing third-quarter earnings in the second week of October.
Shehada said the market could face more selling pressure in the short term as investors free up cash to participate in the IPO, but by the year-end the index — now standing at 9,596 points — could cross the 10,000-mark again.
This year’s intraday peak was 10,103 points — also a five-year high hit on August 22.
In June, global index compiler MSCI upgraded Qatar to emerging market status, which is likely to underpin longer-term bullish sentiment on the bourse as larger funds flow in. The market is up 15.5 percent year-to-date.
Fund managers estimated the upgrade might draw fresh $500m to Qatar when it takes effect next May.
In the United Arab Emirates, Dubai’s index edged up 0.3 percent, gaining for a fifth straight session and is 1.4 percent below the year’s peak.
Dubai is sitting on 67.8 percent year-to-date gains, which makes it the world’s second best performing market after Venezuela. And while the outlook is bullish, retail investors dominate the market and are targeting small-cap stocks, which are now outperforming bluechips.
One such small-cap stock is Union Properties, which retreated 1.8 percent to trim 2013 gains to 123.8 percent.
The company said yesterday it was seeking board approval to increase the percentage of shares which foreign investors are allowed to hold in the company from the current level of 15 percent. However, it is not clear whether this would give any immediate boost to the stock, since foreign ownership is now only about 3.4 percent, according to bourse data.
Bluechip Emaar Properties slipped 0.7 percent, taking its year-to-date gains to 53.6 percent.
Third-quarter earnings may provide a catalyst for bluechips to take centre-stage again, analysts said.
“If Q3 numbers confirm Q2 growth levels, we won’t see a huge move on prices,” said Mohammed Ali Yasin, managing director of Abu Dhabi Financial Services. “But if there is a change in growth, we will have an impact on the market.”
Potential for a positive surprise could come from firms like courier Aramex, Air Arabia and Abu Dhabi’s Waha Capital and telecom operator Etisalat, according to Yasin.
Abu Dhabi’s measure climbed 0.2 percent, extending 2013 gains to 45.8 percent.
In Egypt, the benchmark index slipped 0.3 percent to 5,665 points, halting a four-session rally and failing to make a clear break from the resistance at 5,682 level - the previous peak hit on Auguat 13.
“We’ve been trading within a narrow daily range on thin volumes — we need higher turnover for the market to make its next move,” said Mohamed Radwan, head of equities at Cairo’s Pharos Securities. “Most of the stocks are finding it difficult to break above the current levels. We need more interest from foreign and local institutional investors and a buying trigger to revive appetite.”
The next support level is at 5,245 points, followed by 5,150, Radwan added. Elsewhere, Saudi Arabia’s bourse ended flat, Kuwait ticked up 0.06 percent and Oman added 0.3 percent.