Selling Pressure drives QE Shares into Losses

Selling pressure, especially in small and mid cap equities, drove the Qatar Exchange (QE) to losses making it one of the three poor performers in the Gulf region during the week.

Foreign institutions largely squared off their position as the QE 20-stock benchmark lost a sizeable 1.69% in the week that saw Dubai and Abu Dhabi bourses report 5.38% and 2.37% drops respectively, while Saudi Arabia rose 1.42%, Bahrain (1.14%), Kuwait (0.71%) and Muscat (0.30%).

Profit-booking was rather strong in the banking and services segments as key benchmark settled 148 points lower at 8,593.67 points in the review week that saw al khaliji lining up a QR2.7bn bond issue. Year-to-date (YTD) Doha’s bourse has lost 2.11%, whereas Dubai has reported a stupendous 19% gain, followed by Saudi Arabia (14.91%), Abu Dhabi (6.64%), Kuwait (6.24%), Muscat (2.88%) and Bahrain (1.52%).

About 74% of the stocks were in the red with major shakers being al khaliji, International Islamic, Doha Bank, Commercialbank, Qatar Islamic Bank, United Development Company, Qatar Electricity and Water, Milaha and Barwa. Industries Qatar (IQ), Salam International Investments (SIIL), Woqod and Dlala buck the trend in the week that saw Doha Bank successfully raising $500mn (QR1.82bn) through its dollar-denominated bonds.

Maximum selling pressure was seen in the services sector as its group index tanked 2.52%, followed by lenders (1.67%), insurance (1.41%) and industrials (0.19%) in the week that saw QE announce that it will launch two new indices from April to attract global investors, fund houses and portfolio managers.

The banking index has lost 5.91% YTD; while the indices of insurance, industrials and services gained 8.32%, 5.19% and 1.54% respectively.

Of the 42 stocks; only nine advanced, while 31 declined and two were unchanged in the week that saw SIIL reenter the trading ring after the Qatar Financial Market Authority lifted the trading suspension on the company’s shares.

All of the eight banks, four of the five insurers, five the seven industrials and 14 of the 22 services returned losses in the week that saw the Qatari bourse announce a 15% cap on an individual company’s weight in both its existing and the new 20-stock indices from April 1.

Market capitalization eroded by 1.07% or about QR5bn to QR452.30bn with small, mid and large cap equities falling 3.20%, 2.87% and 0.95% respectively; even as micro caps gained 0.39% in the review week that saw Masraf Al Rayan outline its overseas expansion through acquisitions, especially in the Gulf and wider Middle East regions.

Large, mid and small cap equities have shrunk YTD 5.07%, 1.78% and 0.08% respectively; whereas micro caps gained 2.86%.

Foreign institutions turned profit-takers amid their higher exposure as they were net sellers to the tune of 6.42% against net buyers of 1.85% the previous week.

Although a higher 20.89% of them bought equities in the week ended March 1, a much higher 27.31% of them offloaded compared to 16.33% the previous week.

Domestic institutions continued to be bullish but with lesser intensity amidst their lower exposure as net buying fell to 2.95% from 3.32% the previous week.