DOHA: The London-listed Qatar Investment Fund (QIF) said yesterday it remains overweight in Qatar’s banking and financial services sector at 41.9 percent compared to a market weighting of 39.1 percent. Qatar National Bank remains QIF’s largest holding (18.7 percent of the fund). In the year to end of August Qatar credit grew 5.0 percent, mainly driven by the public sector (up 9.2 percent).
QIF’s Investment Adviser believes that public sector loan growth will remain strong, driven by the government’s infrastructure development plans, rising population and the international expansion of Qatari banks, the Fund’s quarterly investment report noted.
Securities will usually be ‘overweight’ when a portfolio manager believes that the security will outperform other securities in the portfolio.
Industrials remain QIF’s second largest exposure at 24.9 percent (Q2 2016: 26.8 percent) mainly in Industries Qatar (10.8 percent of NAV). We reduced exposure to Gulf International Services to 5.6 percent from 6.2 percent in the previous quarter, while exposure to Qatar Electricity and Water reduced from 7.5 percent to 6.3 percent.
After re-entering the services and consumer goods sector in Q2, QIF increased its exposure to 2.3 percent from 1.8 percent. Exposure to the insurance sector also increased from 2.9 percent to 3.4 percent.
On the Fund’s performance and portfolio structure QIF said its NAV net of dividends rose 5.7 percent during Q3 2016, while the Qatar Stock Exchange (QSE) rose 5.6 percent. After outperforming by 0.7 percent compared to the QSE in the previous quarter, QIF’s NAV outperformed by 0.1 percent for Q3 2016. On 30 September 2016, the QIF share price was trading at a 13.9 percent discount to NAV.
The Investment Adviser increased the allocation to Barwa Real Estate as valuations started to look attractive. As a result, Barwa Real Estate replaced United Development Company in QIF’s top 10 holdings.
The Investment Adviser continues to reduce exposure to Gulf International Services as weak oil prices hit earnings, making valuations demanding. The holding in Ooredoo increased to 6.3 percent from 5.8 percent after the telecom company reported a hike in earnings.
On the country allocation the QIF said it had 22 holdings at September 30, 2016: 17 in Qatar and 5 in UAE. The Investment Adviser reduced exposure to UAE to 4.3 percent from 5.6 percent. QIF added two holdings during Q3: Dubai Islamic Bank and Emirates National Bank of Dubai. QIF sold its holdings in Al Khalij Commercial Bank, National Leasing Company and First Gulf Bank.
