Doha: Qatari stocks earnings are expected to grow 6.9 percent year-on-year (Y-o-Y) on a normalised basis in the third quarter (Q3) of 2022, according to QNB Financial Services (QNBFS) report.
The year 2022 remains an extraordinary year with global stock markets bearing the brunt of global central banks’ hiking of interest rates and retrenchment of quantitative easing as they attempt to fight inflation without sending their economies into a recession/stagflation. “We expect Q3, 2022 earnings for Qatari stocks to grow 6.9 percent Y-o-Y on a normalised basis. On the other hand, on a quarter on quarter basis, normalised earnings should be flat. The Y-o-Y growth in normalised earnings stems from improved operating performance amid still strong oil and gas prices,” the report said.
“Qatari equities have not been immune, as the Qatar Stock Exchange (QSE) Index appreciated as much as 24.7 percent (April 11, 2022), but then declined to almost flattish territory in late June and is now again up by 12.1 percent YTD. The QSE Index remains a relative outperformer among most major regional and global markets. While the Q3, 2022 reporting season should generally be perceived positively, it is unlikely to drive near-term equity performance as the FIFA World Cup Qatar 2022 takes centre stage,” it added.
QNBFS report further said: “We expect the market to remain volatile, we continue to remain positive longer-term on the Qatari market due to the robust oil and gas prices. And with the FIFA World Cup Qatar 2022 on the horizon, we believe the Qatari stock market will benefit from the success enjoyed by Qatar on the global stage. We note that while markets tend to fall in the first three months immediately after the World Cup, returns 12 months after the event are positive, outperforming the MSCI World Index by an attractive 4 percentage points."
It noted that over the medium-to-long-term, the North Field Expansion Project and 2030 Qatar National Vision investments continue to be major growth drivers for local companies. “On top of Qatar’s macro strengths, Qatari companies enjoy robust balance sheets backed with low leverage and decent return on equities (RoEs,) whereas Qatari banks stand out with their exceptional capital adequacy ratios, healthy nonperforming loans(NPLs), strong provision coverage and high profitability,” the report added.
