Qatari bourse index loses 10.85 points

December 31, 2012 - 12:00:00 am

Doha: Qatar Exchange slipped 10.85 points or 0.13 percent yesterday to 8,300.37 points from the previous closing of 8,311.22 points. 

The volume of shares traded up to 2,447,735 from 2,423,635 on Thursday, and the value of shares increased to QR132,853,102.90 from QR112,503,535.61 on Thursday.

Among the top losers were Qatar National Bank whose share dropped 0.23 percent to QR129.20, International Islamic Bank lost 0.76 percent to QR52.00, National Leasing fell 1.09 percent to QR45.50 and Al Kaleej Takaful was down 0.68 percent to QR43.70.

The banking and financial sector dropped 7.92 points while the insurance sector added 23.75 points. The industrial sector gained 0.13 points and the services sector lost 12.12 points.

Meanwhile, Egypt’s stock market held up well yesterday despite a weak currency, as foreign investors continued to buy shares - a sign that a devaluation of Egypt’s pound, which looks increasingly likely, might not be a disaster for financial markets.

The Egyptian pound briefly hit a record low of about 6.30 in interbank trading against the dollar, a fall of roughly 1.8 percent from its previous close. The central bank launched a system of foreign currency auctions yesterday in an effort to conserve its falling reserves. 

Many analysts believe authorities may no longer be willing or able to support the Egyptian pound; in a research note, Pharos Research forecast a free float would be introduced with the pound weakening to 6.50. Some analysts have a longer-term target for the currency of around 6.80.

But the stock market’s calm reaction to the currency turmoil showed the extent to which bad economic news had already been factored into Egyptian share prices, and also that some investors — many of them foreigners — remain bullish on the long-term outlook for equities. 

The main stock index ended 0.5 percent higher at 5,442 points, after a 2.2 percent gain on Thursday. Stock exchange data showed the value of buying by foreign investors, though small in absolute terms, was more than double the value of their selling during the day.

The index is up 50 percent from its level at the end of last year and has regained all of its losses since late November, when a political crisis erupted over President Mohamed Mursi’s drive to push through a controversial new constitution for the country.

The passage of the constitution, though still the subject of bitter protests by the opposition, is being seen as positive by some investors because it paves the way for parliamentary elections in about two months. A new parliament could restore some political normalcy and allow the government to focus on economic issues.

Prime Minister Hisham Kandil said yesterday he expected a resumption of talks in January with the International Monetary Fund on a $4.8bn loan, after the talks were suspended because of the political turmoil.

Depreciation of the Egyptian pound could saddle foreign investors with currency losses and perhaps encourage more capital flight in the short term.