GulfBase GCC Cap Indices
Large Cap3,931 -0.26
Med Cap3,906 0.04
Small Cap5,103 -0.28
Micro Cap8,532 0.08

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Ticker Price Volume
SABIC 97.68 2,120,185
EEC 21.01 5,023,229
QNBK 146 90,102
ALMARAI 72.75 174,955
QGTS 20.1 920,769
GFH 0.62
KCBK 14.56 49,218

Commercial Bank of Qatar

Source: NBK Capital

The Qatar Investment Authority (QIA) will increase its stake in the listed Qatari banks by an additional 10% in 1Q2011. Although it was not explicitly, but we believe it is implicit that this will exclude Qatar National Bank (QNB) which is already 50% owned by the QIA. Of the other banks under coverage, the QIA currently owns a 9.0% stake in each of the Commercial Banks of Qatar (CBQ) and Doha Bank. It was not disclosed at which prices the capital injections will be conducted.

We view this additional purchase as another reiteration by the Qatari government of its strong and proactive support of the Qatari banking sector. We believe this is a pre-emptive move to cement the already-high capital adequacy ratios (CARs) of Qatari banks in view of the high expected loan growth in Qatar and the implementation of basel lll.

For now, we maintain our fair values of the Qatari banks at QR 184.6 per share for QNB (Hold recommendation), QR 99 per share for CBQ (Accumulate recommendation), and QR 63.7 per share for Doha Bank (Hold recommendation).

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