By Satish Kanady
DOHA: Investors found more reasons to push Qatar stocks higher yesterday to finish at a new record high in nearly six years amid the strongest trading since 2010.
The Qatar Exchange index rose 1.52 percent to hit 12,375 points, inching closer to the bourse’s historic highs of 12,433 points. The encouraging data on local economy, strong budget projections and confidence on the market upgrade by global index compilers continue to drive the market.
The momentum was evident in all the sector indices. Real estate sector ended the session with a strong 5.98 percent gain. The Insurance sector which contributed heavily to 2013 earnings of the country’s corporate earnings, rose 3.25 percent.
Pushed by Commercial Bank and International Islamic, the banks and financial services edged 1.74 percent up. Heavy weight QNB, that announced a 13.7 percent higher first quarter net profit yesterday, closed 1.29 percent up. The telecom index that dropped 0.76 percent on Tuesday surged to 2.27 percent as Ooredoo and Vodafone continued to rev up. Transportation was up by 2.25 percent and consumer goods gained 0.63 percent.
Analysts said the market is expected to continue on the current trajectory at least until May, when the MSCI will upgrade Qatar market to the ‘emerging market’.
“The market is abuzz with a combination of strong positive notes. Investors have huge expectations on the MSCI upgrade, budget projections are really encouraging. The first quarter results have started trickling in. There is a huge buying interest among foreign investors,” an analyst told The Peninsula.
“The rise was backed by strong buying appetite among local and foreign institutions, amid strong liquidity triggered by active trading on real estate stocks. It seems the index is targeting the 12,500 points:, said another market analyst
New data published yesterday by an Arabic business news portal noted stocks worth QR15bn were bought by foreign investors during the first quarter of 2014, accounting for an estimated 38 percent of the total market liquidity.
Deutsche Bank analysts noted yesterday Qatari market posted significant gains since the release of the provisional list by MSCI in June 2013. Aleksandar Stojanovski, Research Analyst at Deutsche Bank, said: “We expect the inclusion of more stocks to also drive a higher weighting of around 1.3 percent versus 0.95 percent previously, which in turn should also push more liquidity into the two markets when Qatar and UAE are officially inducted from June 2, 2014.”
With the increased market focus that comes with the Emerging Market status, Qatar and UAE are able to attract strong foreign fund inflow. The two countries led the region in fund inflows last year, bringing in a total $1.8bn, of which Qatar received $848m, Aleksandar said.
On Wednesday, the market cap surged to QR700bn from the previous session’s QR686bn. The traded value increased toQR1.53bn from QR915m. Total traded volume rose to 43 million shares from 23 million shares.