By Basheer Yusief Kahloot
Qatar’s stock index witnessed a sharp decline due to political turmoil in Syria. The decline is not only limited to Qatar Exchange (QE), but also extended to other regional markets and major international stock markets.
The benchmark index lost more than 700 points in the early days of the week before consolidating on Wednesday when some stocks quickly recovered. This helped the index to rise on Thursday, despite the heightened political tensions in the region.
There was no important news for companies during the week, except about some deals and the most important of them was the sale of Salam International’s two large plots of land in which a profit of up to QR48m was achieved.
Because of regional developments, the general index has dropped in the week a by total of 490.5 points, below than in the previous week. The All-share index and all-sector indices decreased, the market capitalisation shrank about QR24bn to reach QR526.5bn.
The benchmark index dropped by 490.5 points, or 4.85 percent, to reach 9,619. The All-share index fell by 115.4 points, or 4.85 percent, to 2,424.4 points.
The General index and all-share indexes drops were based on the fall of stock prices in all sectors, where transportation sector decreased by 6.26 percent and the real estate sector dropped by 5.98 percent. While the banks sector lost 4.72 percent, the telecoms and industries fell 4.56 percent and 4.45 percent, respectively. The consumer goods and services stocks dropped 2.36 percent.
The decrease was an outcome of low share prices of 39 companies, and the price surge of the shares of threecompanies. The drop in the prices of Investor’s Group shares was the biggest at 9.95 percent, followed by Dlala shares at 8.81 percent. Qatar Navigation dropped 6.92 percent. The International Islamic and Medicare dropped 6.88 percent and 6.35 percent respectively. UDC lost 6.02 percent.
Only three stocks were up. Salam International rose by 2.97 percent, followed by Doha Insurance, up 1.56 percent, and Al Ahli Bank by 0.92 percent.
In terms of liquidity, we find that the total trading value has risen to the level of QR2.3516bn, and the daily average rose to QR470.3m compared to QR362.6m in the previous week.
The total trading value of top six companies reached about QR1.2bn, 51.4 percent of the total trading value. Industries Qatar topped with QR411.1m, followed by QNB with QR225m. Nakilat’s trading value reached QR179.9m. While Qatar Navigation’s trading value reached QR137.6m, the UDC’s value reached QR130.3m and Ooredoo reached QR126m.
Qataris topped in net buying, where Qatari portfolios buys were at QR102.5m and individuals bought worth QR114m. In contrast, the net selling by foreign institutional investors reached QR173.9m and individuals sold stocks worth a total of QR 43m.
To sum up, I could say that the benchmark index dropped because of the political developments, and it was the worst decline this year in a single week.
With the index fall, all main groups dropped with exception of the total trading volume, which exceeded QR2bn in the week.
The market is likely to remain volatile until the Western threat to Syria is settled.