Global woes hit Qatar stocks for second month

02/09/2015 07:49 AST

Weighed by oil slump and China worries, Qatari stocks ended in red for the second consecutive month in August. Shares in telecom stocks crashed 12.66 percent in the past month. The benchmark index was down 1.88 percent on month-on-month; and 7.09 percent year-to-date yesterday.

The entire stocks, barring four, ended in red in August and the Industrials and Banking stocks, two sectors which have maximum weightage in the index, tanked 4.98 percent and 1.23 percent, respectively.

Of the telecom stocks, Ooredoo tumbled 13.77 percent and Vodafone crashed 10.04 percent. Gulf International, Commercial Bank and Barwa Real Estate were the top losers. Barwa was down by 12 percent compared to the previous month. Nearly QR18bn evaporated from the market, as the market cap plummeted to QR608bn from the previous month’s QR626bn.

The slump in oil prices compounded by Chinese imbroglio, is continuing to send jitters among traders. Oil price drop has dampened the near term sentiment, analysts told The Peninsula.

The positive correlation with oil price and geopolitical tension were the main reasons behind the weakness for GCC Equity market in August. The volatility in the oil prices kept investors uncertain of the market direction and limit their participations, QNB analysts said.

“The first half earnings in Saudi, the biggest market in the region, witnessed a decline of 12 percent compared to the same period last year in spite of good results recorded by the banking sector which were offset by the steep decline in the petrochemical sector. The Qatar stock market recorded highest half yearly earnings growth at 14 percent in the GCC equity markets”, QNB noted in its ‘investment outlook’ yesterday.

“The lackluster performance of Qatari equities in 2015 was further compounded by the China-induced global equity sell-off last week, falling to 8 percent year-to-date (ytd) as of August 27”, said analysts at NBK.

The Commercial Bank, Masraf Al Rayan, Gulf International, QNB and Barwa were the top five performers in terms of value in August. Sector-wise, Banks and Financial services was the value leader, accounting for 41.37 percent of the total traded value.

Ending a five-day rally, the market declined 1.28 percent yesterday to finish at 11,563 points. Again, telecom was the main drag. The sector plunged 3.69 percent, with Ooredoo tumbling 4.89 percent. Vodafone slipped0.99 percent.

Stock markets across the Middle East fell yesterday alongside steep drops in global stock prices because of renewed uncertainty about the state of China’s economy, reported Reuters. Saudi Arabia’s main stock index fell 1.1 percent with all sectors in the red. China is the second-biggest market for the kingdom’s exports and a hard landing for its economy would have a big impact on Saudi Arabia.

Dubai’s benchmark dropped 2.1 percent in another broad sell-off which affected all sectors. Abu Dhabi’s bourse fell 2.6 percent.

Egyptian stocks were down 0.7 percent after a 2.8 percent jump the previous day triggered by the discovery of a potentially huge gas field off the country’s Mediterranean coast.

The Peninsula