Qatar Exchange index dips as regional bourses tumble

January 27, 2014 - 12:00:00 am
Doha: Qatar Exchange index lost 39.45 points yesterday to close at 11,298.96 points from the previous closing of 11,338.41 points on Thursday.

The volume of traded shares fell to 7,966,702 from Thursday’s 8,757,433 and the value of shares decreased to QR453,302,809.84 from QR605,318,483.77 on Thursday.

Among the top losers were Qatar National Bank whose share down 0.96 percent to QR186.20, International Islamic Bank lost 1.13 percent to QR70, Commercial Bank of Qatar fell 1.75 percent to QR72.90 and Electricity and Water decreased by 1.09 percent to QR181.00.

The Banking and Financial sector index lost 0.83 percent while Consumer Goods and Services sector index dropped 0.39 percent. The industrial sector was up 0.56 percent while insurance sector added 0.75 percent.

Meanwhile, shares in Dubai and Abu Dhabi tumbled yesterday, leading a region-wide decline following a sharp sell-off in US and emerging markets on fears of slowing growth in China and reduced support from US monetary policy.  

Dubai’s bourse, which has been driven to hefty gains by local retail investors, fell 2.2 percent — recording its biggest one-day loss in more than two months as it came off Thursday’s five-year high.  Trading volumes were lower than they were during last week’s gains and the market closed well above the day’s low, suggesting buyers are ready to step in on dips.  

Neighbouring Abu Dhabi’s measure lost 1.8 percent, also retreating from a five-year high. 

Gulf economies are mostly insulated from a pull-back in emerging markets and currency risks there, because of their state budget and current account surpluses, as well as continued government spending on infrastructure projects.  “The market was registering higher highs and in a way, this was a good trigger for some profit-taking, which is healthy,” Rami Sidani, Schroders Middle East head of investment, said of Dubai.

Small-cap shares had led gains in recent sessions, increasing the potential for a sharp pull-back. 

“We are seeing buyers who have been waiting on the side for some correction - this will continue to be the case because the local fundamentals are robust and economies are resilient,” Sidani added. 

In Saudi Arabia, the index fell 0.4 percent, coming off Thursday’s five-year high. Petrochemical shares were initially hardest hit but then recovered and the sector’s index  closed up 0.3 percent. China is a major market for Saudi petrochemical products, which depend on global demand. 

“People are taking a little bit of profit off the table and being cautious - but there is an indication liquidity has re-entered the market,” said John Sfakianakis, chief investment strategist at Saudi investment firm MASIC. 

“There is bullishness in the market and dips offer opportunities. The China story (suggesting its economy is weakening) is not so well-founded — and even if it slows, I don’t see global growth taking a dive.”      

In Qatar, the benchmark slipped 0.4 percent to trim January’s gains to 8.9 percent. Qatari individuals and institutional investors were net sellers, bourse data showed, while foreign investors were buyers.