DOHA: Investors on the Qatari bourse have become richer by over a huge QR21bn ($5.75bn) in barely seven trading days since the dawn of the current year, thanks to stocks rallying ahead of full-year profit and dividend declaration by the listed entities.
The market capitalisation of the bourse (Qatar Exchange) was QR459.88bn at the close of trading on December 31, the last trading day of 2012, which surged to QR480.88bn last Thursday, up 4.6 percent.
The capitalisation figure has been jumping by QR3bn on average each trading day since the market reopened after New Year on January 2. There have been seven trading days since.
“We expect the rally to continue,” an investor said. The equity market normally witnesses a bullish run at the start of a new year, anticipating robust profit and dividend declaration by the companies.
The main index of the bourse gained five percent, or about 423 points, since the beginning of the year, from 8,359 as on December 31, 2012 to 8,782 on January 2 when the market closed after last week’s trading. The year 2012 was bad for the bourse as stocks plummeted amid subdued trading with all indicators reflecting a decline except the market capitalisation figure that surged at the year-end, albeit by a marginal QR2.53bn.
More than 10 times that yearly gain was witnessed in just seven days of trading this year.
“One of the factors that have had a positive impact on the world stock market, as also on Qatari shares, was the end now being in sight of Washington’s fiscal woes,” said another investor.
Nearly all counters have shown improvement since the dawn of 2013 except insurance, with a majority of the 42 listed entities ending higher in daily trading. As for trading through last week, 29 stocks ended higher at the end of trading on Thursday, for instance.
Investors said liquidity flow into the bourse was a problem last year and added they hoped the situation would change this year as stocks were expected to remain generally buoyant.
As for net profits as well, 2012 wasn’t an eventful year as collective profits of the listed entities for the first three quarters were only marginally more than those in the same period of 2011.
The net profits of the companies in the first nine months of 2011 totalled a little more than QR28bn ($7.67bn) — a figure that showed only a slight increase (QR28.52bn) in the first three quarters of 2012.
So unless the companies perform exceptionally well in the fourth and the last quarter of 2012 (which is unlikely), their collective net profits are not expected to show considerable increase over the previous year, analysts said.