The Qatar stock market staged a remarkable turnaround in July to emerge as the second best performing market in the GCC. The market broke the four straight bearish weeks as the benchmark index rose 4.2 percent on month-on-month. Remember, the last time when the QSE main index lost four straight weeks was during the peak of 2008 global financial crisis.
The month of July witnessed all sector indices finishing in green territory. But the index still closed lower than the 10,000-point mark at 9406.06 points. Yesterday, the benchmark index further plunged by 1.03 percent to close at 9,308.91 points.
QNB analysts said correction may continue. They expect the 9,000 mark to be tough support to break in the time being. QNB’s expected resistance level is 9,600 and expected support level is 9, 5000.
QSE Chief Executive Officer Rashid Ali Al Mansoori said more than 50 foreign investment portfolios have opened new accounts in just one week to trade in the shares of the companies listed on Qatar Stock Exchange.
This large turnout by foreign portfolios and international investment instructions reflects the strong fundamentals of Qatar’s economy and the investment attractiveness of Qatar Stock Exchange and its listed companies, he said.
“Despite the blockade imposed since two months on Qatar by some neighboring countries, the Qatar Stock Exchange has proven its robustness and achieved positive results.Since the beginning of the crisis, the average daily trading value has increased so far by about 20 percent to reach about QR300 per day compared to about QR250m per day, while the Qatari Stock Exchange has attracted a wide range of investors; including retail and institutional, local and foreign investors” Al-Mansoori added.
Among the sector indices, banks and financials rose the most in July. Driven by QNB, the sector surged 5.58 percent.
Market watchers noted that the combined deposits of the blockade nations in Qatari banks is estimated at $18bn, which are due to mature in two months. “The government of Qatar is in a position to support local banks in the event of foreing institutions withdrawing deposits. This sends a strong signal to the market that the government is able and willing to cover liquidity shortfalls”, one of the fund managers at Commercial Bank said in a note sent to the investors.
According to KAMCO Research, trading activity in the region improved in July, after receding by 14 percent m-o-m in June due to lower number of working days due to holidays. Overall value traded in the GCC was higher by 8.5 percent and reached $21.7bn. However the MSCI GCC index which gained 4.9 percent in June dropped. Saudi market, which saw a 4.5 percent fall, was the worst performer of the region in July.