Selling pressure weighs; capitalisation down by QR7bn


30/06/2012 07:35 AST  Gulf Times

Strong selling pressure from foreign institutions dragged the Qatar Exchange (QE), resulting in more than QR7bn erosion in notional wealth during the week.

More than 83% of the equities extended losses to investors as the QE Index (based on price data) and the Total Return Index (which factors in dividend income as well) shrank 1.58% each in the week that saw Saudi Arabian bourse lose 3.69%, followed by Abu Dhabi (2.43%), Kuwait (1.90%), Dubai (1.26%) and Bahrain (0.13%); while Muscat gained 0.43%.

Profit-booking was even among small, micro, mid and large cap equities in the week that saw the General Secretariat for Development Planning (GSDP) forecast that the country’s real economy is expected to slowdown to 6.2% this year and 4.5% next year, mainly on the hydrocarbon sector.

Doha’s bourse is down 7.47% year-to-date (YTD) vis-à-vis Bahrain’s fall of 1.48%, followed by Kuwait (0.43%) and Muscat (0.09%); while Dubai, Saudi Arabia and Abu Dhabi have gained 7.28%, 2.62% and 1.89% respectively.

Major losers included Qatar Telecom (Qtel), Industries Qatar (IQ), Qatari Investors Group, Mazaya Qatar, Barwa, Gulf Warehousing, Mawashi, Salam International Investment, Dlala, Commercialbank and Qatar Islamic Bank (QIB) in the week. The GSDP report also said for every billion riyal spent on infrastructure; only $200-300mn stayed in the domestic economy.

The QE All Share Index (comprising wider constituents) lost 1.42% with the telecom index plunging 3.41%, followed by industrials (2.97%), realty (2.09%), transport (1.87%), consumer goods (1.22%) and banks and financial services (0.37%); while the insurance index rose 0.11% in the week that also the GSDP say corporate deposits with banks in Qatar are on the downswing, thus weakening the prospects of project finance.

The indices of transport and real estate have lost YTD 10.55% and 5.27%; whereas those of consumer goods, telecom, insurance, industrials and banks and financial services gained 24.76%, 12.72%, 10.67%, 3.96% and 0.31% respectively.

Of the 42 stocks; only seven advanced, while 35 declined in the week that witnessed Qatar Petrochemical Company, an IQ subsidiary, say that it’s planned $5.5bn petrochemical complex is well on track to be commissioned by 2018.

Nine of the 12 banks and financial services, all of the eight industrials, seven of the eight consumer goods, all of the four realty, all of the three transport and two each of the five insurance and two telecom stocks reported shrinkage in their prices in the week that saw global credit rating agency Moody’s say Qtel’s proposed minority stake purchase in Wataniya is credit negative.

Market capitalisation eroded 1.70% to QR446.10bn with small, micro, mid and large cap equities melting 1.65%, 1.62%, 1.51% and 1.31% respectively in the week.

Mid and large cap stocks have fallen YTD 8.10% and 7.11%; while micro and small caps gave gained 13.84% and 4.85% respectively.

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