Selling pressure on banking, transport stocks

14/04/2012 08:15 AST

The banks and financial services and transport segments notably witnessed selling pressure, steering the Qatar Exchange to a negative terrain in the week amid surge in trading volume mainly led by the telecom sector.

Both domestic and foreign institutions showed lesser penchant for buying as the QE 20-stock Index (based on price data) and Total Return Index (which incorporates dividend income as well) fell 0.45% and 0.43% respectively in the review week that saw Saudi Arabia's bourse plunge 4.08%, followed by Abu Dhabi (1.40%), Dubai (0.46%) and Bahrain (0.44%); while Muscat and Kuwait gained 2.64% and 0.71% respectively.

Selling pressure was pronounced in large cap equities in the week that featured global credit rating agency Moody's assign provisional ratings to the $5bn Euro Medium Term Note (EMTN) programme of Commercialbank (Cb).

Year-to-date (YTD) Doha's bourse is up 0.07% vis-à-vis Dubai's stupendous 24.04% gain, followed by Saudi Arabia (18.01%), Kuwait (6.44%), Abu Dhabi (5.03%) and Muscat (5.02%); while Bahrain fell 0.65%.

Major losers were Doha Bank, QNB, Cb, Al Meera, Industries Qatar, Gulf International Services, Mazaya Qatar, Qatar Telecom, Milaha and Nakilat, whereas Vodafone Qatar, Qatar Oman Investment, Salam International Investment and Aamal Company bucked the trend in the week that saw Al Meera Consumer Goods Company, which is currently exploring options to restructure its capital base, embark on a multi-pronged strategy to expand its overseas and domestic operations.

The QE All Share Index (comprising wider constituents) was down 0.13% with the indices of insurance, transport and banks and financial services shrinking 1.18%, 1% and 0.49%.

Telecom, industrials, consumer goods and services as well as real estate indices rose 1.67%, 0.49%, 0.25% and 0.05% respectively in the week that saw QNB acquire a 49% stake in Libya's Bank of Commerce and Development.

The indices of consumer goods and services, telecoms, insurance, industrials, banks and financial services, real estate and transportation have gained YTD 25.35%, 19.45%, 11.77%, 10.40%, 4.05%, 1.03% and 0.19% respectively.

Of the 42 stocks; only 17 advanced, while 24 declined and one was unchanged in the week that saw Moody's say that Qatar's banking sector is stable, reflecting the country's strong macro environment and high public spending levels that will continue to sustain growth and bank lending activity over the 12-18 month outlook period.

Six of the 12 banks and financial services, five of the eight consumer goods and services, three each of the eight industrials, the five insurers, the four real estate and the three transport; and one of two telecom stocks close lower in the week that featured a Global Investment House study which said Qatar's reported moves to relocate as many as 14 quarries, owing to environmental issues, would not affect the local cement manufacturers.

Market capitalisation was down 0.19% or QR90mn to QR463.10bn mainly due to a 0.73% fall in large cap equities. Mid, micro and small equities gained 1%, 0.60% and 0.12% respectively in the week that saw Qatar's inflation remain unchanged month-on-month in March; but up 1.2% year-on-year.

Micro, small and mid cap stocks have YTD gained 10.71%, 2.82% and 1.42% respectively; whereas large caps fell 0.98%.

Domestic institutions were increasingly bullish amidst their lower exposure as their net buying rose to 6.25% from 5.98% the previous week.

A much lower 18.23% of them were into buying against 26.28% in the week ended April 5 and a lower 11.98% into selling compared to 20.30%.

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