Qatar stocks up as earning season starts

09/07/2014 07:48 AST

Qatar Exchange (QE) index climbed 1.35 percent yesterday as the second quarter earnings officially started trickling in. The index closed at 12,549 points ahead, with all the sector indices entering green.

The Banking major QNB rose 1.74 percent before the lender disclosed that its net profit grew by 7 percent to QR5.1bn for the first half of 2014. The bank announced its total equity increased by 10.4 percent year-on-year and earnings per share reached QR7.2, compared to QR6.8 a year ago.

International Islamic, which is expected to announce their semi-annual financial in the next couple of weeks rose 1.68 percent. The banking stocks’s combined traded value jumped to QR191m from the previous session’s QR95m. The sector’s total traded volume surged to 3 million shares from 1million shares.

Market cap rose to QR686bn from QR675bn.

Developer Ezdan surged 7.02 percent and UDC gained 1.10 percent, while Vodafone jumped 2.75 percent.

QNB Financial Services (QNBFS) analysts expect Q2, 2014 earnings for Qatari stocks under their coverage to have a mixed outlook. Despite showing a modest sequential growth in aggregate net income, several companies are expected to experience bottom-line volatility in Q2, 2014.

Industries Qatar (IQCD), Qatar Electricity & Water (QEWS) and Gulf International Services (GISS) will positively contribute toward the Q2, 2014 aggregate bottom-line. However, the seasonal nature of some companies’ businesses, lack of dividend income, lower investment income from debt securities for banks, etc. could restrict the earnings growth of several companies. Looking ahead, QNBFS’ annual estimates remain robust and it expects a 9.2 percent YoY bottom-line growth in 2014, followed by 11.1 percent and 11.5 percent in 2015 and 2016, respectively.

QNBFS is of the view that foreign institutional (FI) activities will be key to market performance. So far YTD, FI investors have already pumped in $1.87bn as compared to $700mn in net equity buying in 2013.

The Peninsula