Heavy FII buying pushes QE index to new highs

May 26, 2014 - 1:11:52 am

DOHA: Foreign institutional investors continue to lap up prized Qatari stocks as the local bourse is all set to join the coveted MSCI Emerging Markets status from June 2.

On Thursday as well as yesterday, a lot of speculative trading was witnessed for stocks that are to be included in the MSCI Index.

“There is no justification for the prices of these stocks going up except that they are going to be part of MSCI Index, and we don’t know how the stocks would behave once they are included the MSCI Index,” stock and financial analyst Bashir Al Kahlout told this newspaper. He said he found it quite strange that Masraf Al Rayan shares rose yesterday while those of Woqod fell. 

Masraf is set to be part of MSCI Index, while Woqod, though a fundamentally solid stock, is not going to be a part of the MSCI Index.

Net buying by foreign institutional investors was high on Thursday as well as yesterday. The value of the stocks they lapped up on Thursday was an incredible QR546m, and yesterday the figure was equally high, at QR322.84m.

Their sell volumes and the value of the stocks they offloaded were much lower on these two days. 

Local institutional investors seem to be less excited as evidenced from their buy and sell volumes and the value of traded shares. Net selling by them was high on the two days in question.

The exchange will be closed today with analysts expecting trading to stabilise at the current level by Tuesday. Meanwhile, heavy trading pushed the benchmark index of the exchange up 2.63 percent yesterday, with the prices of those stocks that are going to be included in the MSCI Index rising.

The index closed at 13,350.54 points, up 2.63 percent, with the market capitalisation jumping to a record QR735.32bn ($202bn).

The trading value on the bourse was a record QR1.32bn ($400m), while volume of the shares traded totaled a massive 26.83 million.

The number of deals concluded on the bourse breached the magical 10,000 mark, to 11,611 at the close of trading yesterday. It is rarely that so many transactions take place on the QE.

In the region, UAE markets were closed for a national holiday yesterday. Mid-cap stocks helped Cairo’s main share index climb 0.4 percent to its highest close since August 2008. Meanwhile, Saudi Arabia’s index rose 0.2 percent to 9,772 points, coming within 0.5 percent of May 14’s six-year closing high of 9,820. 

The Peninsula