Selling pressure in large and small caps weighs on DSM

30/05/2009 00:00 AST

Selling pressure, especially in the large and small cap stocks, dragged Qatar's bourse down in the week ended Thursday despite rising oil prices, the mainstay of the Gulf economies.

Four of the five days were in a dry spell and the 20-stock Qatar Share Index settled 3.21% or 219 points lower at 6,590.32 in the week that featured a report from Shuaa Capital that said strong macro economy and a "bottomed" out bourse had considerably strengthened investors' confidence in Qatar.

Local institutions were seen primarily responsible for imparting bearish mood in the week that saw Qatar Telecom's (Qtel) move to raise $5.5bn through Global Medium Term Notes, which also got ratings from global agencies such as Moody's, Standard & Poor's (S&P) and Fitch.

Notable losers were Doha Bank, QNB, Commercialbank, Qatar Islamic Bank (QIB), Alkhaliji, Masraf Al Rayan, United Development Company, Qatar Shipping (QShip) and Qatar Real Estate Investment (QREIC) in the week that witnessed Ezdan Real Estate's announcement on exploring options to sell a portion of its assets to a Malaysian stock exchange listed investment fund.

However, Industries Qatar (IQ), Qtel and Barwa saw their stocks gains in the week that saw QShip making its intention to sell its subsidiary Qcon to Qatar America Asia Consortium for $110mn.

The overall profit-taking momentum came amidst buying support from local and foreign retail investors as well as foreign institutions in the Doha Securities Market, which is down 4.30% year-to-date (YTD).

Insurance and lenders stocks lost 16.22% YTD and 13.05%, while those of services and industries rose 13.92% and 6.59% respectively.

Trading volumes, particularly of lenders, were shallow in the week that saw Qatar Industrial Manufacturing, in association with a "strategic" partner, undertaking a Chlorinated Paraffin Wax joint venture project, estimated to cost QR300mn.

Selling was rampant in the banking and financial institution, whose index melted 5.17%, industries 0.75% and services 0.37%, while that of insurance's gained 1.31% in the review week that featured Qatar Islamic Insurance bagging a three-year contract worth QR31.3mn from the Ministry of Interior.

About 70% of the equities were in the red as of the 43 stocks, only 10 gained, while 30 fell, two were unchanged and one was not traded in the week that saw QIB, through its European Finance House, launching the $30mn open-ended 'Global Sukuk Plus Fund', projecting a 34% return to investors in the first three years.

All of the nine lenders, one of the five insurers, four of the seven industries and 16 of the 22 services stocks closed lower in the week that witnessed S&P affirming its 'A' long term counterparty credit and insurer financial strength ratings on Qatar Insurance with a stable outlook.

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