Investors richer by QR17bn on QE this year

February 07, 2013 - 6:41:25 am

DOHA: Qatari stocks continue with the gains they made last month after having witnessed a 4.79 percent slump in 2012 that was mainly fuelled by mounting selling pressure.

Investors on the local equity market have become richer by almost QR17bn ($4.65bn) since the dawn of the current year.

With bank deposit rates remaining at disappointingly low levels and the stocks showing some improvement, analysts expect increased liquidity flow into equities until at least the real estate sector begins re-attracting investments in a big way.

Land and property prices continue to be high and investors are said to be waiting for a slew of mega projects to be launched to go on a buying spree again, say analysts. 

Qatar Exchange’s main 20-share index that gained 4.38 percent last month, reversing the downslide of 2012, surged over 410 points higher to 8, 769.20 at the close of trading yesterday.

A KAMCO analysis of GCC equities released recently said corporate earnings and positive economic fundamentals helped boost investor confidence to nearly wipe out 2012 losses.

The heavyweight banking sector that bolstered trade all of last month seems to be losing a bit of steam after reporting collective net profits to over QR16bn for 2012, that was slightly below investors’ expectations.

Overall market capitalisation of QE has soared QR17bn, from QR459.88bn ($126bn) at December 2012-end to QR476.87bn ($130.6bn) yesterday.

Liquidity measures have improved since the close of 2012 with daily trading value and volume movements now averaging over QR240m and over seven million shares daily (based on yesterday’s figures).

What is awaited by ordinary Qatari investors now is a rejuvenation of Qatar’s IPO (initial public offering) market. According to Kuwait-based Global Research, Qatar’s primary market did not witness any activity at all.

A Global report on GCC markets’ performance in 2012 said during the middle of last year the Qatari bourse revealed that it was in talks with several companies for IPO launch. “However, none materialized by the end of the year.”

Recently, the Minister of Economy and Finance has announced that plans are afoot to partly privatize some state-owned companies and launch primary issues to ensure the participation of nationals. It is, however, not known if the IPOs will be launched this year or later.

The Peninsula