DOHA: Qatari stocks didn’t fare well in 2012, leaving investors largely dejected as they could make only marginal gains of QR2.53bn, or $693m, in the entire year as reflected by the meagre increase in the market capitalisation of the bourse.

The main index of Qatar Exchange (QE) was down 420 points, or 4.79 percent, to 8,358.94 at the end of the year yesterday over 2011. The market capitalisation had risen by more than QR7bn ($1.95bn) in that year.

Trading on QE is usually robust on the last day of the year, but the mood was subdued yesterday as the trading value was barely QR230.44m, while volumes remained low at a little more than 4.86 million shares across 2,165 deals.

Contrast this to the last trading day of 2011 (December 29, a Thursday) when the trading value was more than QR1bn, while volumes totalled a massive 46.13 million shares. Overall, trading value for the entire year (2012) totalled QR71.46bn ($19.57bn), down 14.43 percent from QR83.51bn ($22.87bn) in 2011.

Trading volumes grew 5.45 percent, from 2.3 billion shares in 2011 to 2.4 billion by 2012-end, but the number of transactions dropped 21.22 percent to 881,663 over 2011 when the figure had crossed a million mark (1.19 million).

The banks and financial services sector topped in terms of trading value for the entire year.

A prominent stock and financial analyst attributed subdued trading on the Qatari bourse to a mix of factors, important among them being slow growth in non-energy companies, particularly in the past six months.

“This is partly reflected in the profitability of the companies,” said Bashir Yusuf Al Kahloot. The companies had shown profit growth in double digits (over 20 percent) in 2011, whereas in 2012, in the first three quarters, the rise in their collective profits was barely 1.88 percent.

Asked if liquidity flowed into the real estate sector due to a slackening equity market, Al Kahloot replied in the negative and said even the real estate sector has been witnessing a slowdown. 

“Supplies still exceed demand,” said Al Kahloot, citing the example of Barwa’s vast commercial complex in Abu Hamour where the company, he insisted, had been forced to cut the rent by one-third, from QR125 per square meters to QR39 per square meters.

Al Kahloot said that poor dividend distributed by the listed companies last year and companies sucking liquidity from the market through a slew of rights issues also played their part in keeping the stocks subdued.

The analyst said on top of local factors, the euro-zone crisis contributed its bit to keeping Qatari shares subdued. Europe is the region where liquidity normally flowed from in the past. “Now, they need liquidity. This has affected Qatari stocks to some extent,” said Al Kahloot.

The Peninsula