Qatari Shares at 6-Week High, Outperform Regional Gains

Qatar’s shares outperformed regional markets on Thursday, rising to a six-week high as bargain hunters returned to the overlooked market, while other bourses also edged higher.

Doha’s index climbed 0.8 percent to its highest level since Sept. 19. The market has been trapped in a sideways range in recent weeks due to earnings that disappointed investors.

Large-caps Qatar National Bank and Industries Qatar were the main support, rising 2.1 and 1.9 percent respectively. Earlier this month, QNB posted a 14.3 percent rise in quarterly earnings which missed estimates, while IQ reported a six percent drop in nine-month profit.

UAE markets meanwhile, struggled to make gains ahead of a long weekend. Dubai’s index added 0.2 percent, trading in a tight range since hitting a five-year peak earlier this week.

“There’s little upside in UAE – the re-rating of multiples has already been done,” said Ali Adou, portfolio manager at The National Investor. Investors optimistic that Dubai will win the right to host the World Expo 2020 have already positioned funds, Adou said, adding that earnings have also been priced in.

“The next catalyst will be fourth-quarter results and dividends early next year. It’s healthy to see a correction or the market can go stagnant,” He added.

Abu Dhabi’s measure climbed 0.2 percent. UAE markets will close on Sunday for a one-day holiday marking the Islamic calendar’s New Year.

In Saudi Arabia, heavyweight sectors of telecommunications, petrochemicals and banks edged higher as investors switched positions post earnings.

The main index advanced 0.5 percent to 8,044 points, but analysts are doubtful the market can break above the August peak of 8,223 because some of the major firms reported below-forecast earnings.

“Our view on the market as a whole is a little bit bearish,” said Asim Bukhtiar, head of research at Riyad Capital. “It will hug the 8,000 level over the coming weeks and towards the end of the quarter, expect some pickup in activity, because of full-year earnings and dividends.”

Saudi Telecom Co climbed 2.3 percent to hit a four-year high after it agreed to take full ownership of Bravo, a unit of Kuwaiti operator Wataniya.

The stock has rallied 7.4 percent in the previous session after it posted a surge in quarterly profit that beat estimates.

Petrochemical index added 0.3 percent and banking sector’s measure gained 0.4 percent.

Shares in food firm Savola Group rose 2.8 percent, snapping a four session drop. The shares fell this week as the stock went ex-dividend but it also reported a third-quarter net profit growth of 12.8 percent.

“Savola is a one of the favourite picks in the agriculture sector and the recent pressure was unjustified,” said Hesham Tuffaha, a Riyadh-based fund manager.

Tuffaha said a downward trend in commodity prices should help Savola increase margins and boost earnings in the next quarter.

Elsewhere, Egypt’s measure added 0.1 percent, while Oman and Kuwait rose 0.2 and 0.3 percent respectively.

THURSDAY’S HIGHLIGHTS

QATAR

* The index rose 0.8 percent to 9,837 points.

DUBAI

* The index gained 0.2 percent to 2,922 points.

ABU DHABI

* The index edged up 0.1 percent to 3,846 points.

SAUDI ARABIA

* The index climbed 0.5 percent to 8,044 points.

EGYPT

* The index edged up 0.1 percent to 6,182 points.

KUWAIT

* The index climbed 0.3 percent to 7,946 points.

OMAN

* The index gained 0.2 percent to 6,674 points.

BAHRAIN

* The index advanced 0.3 percent to 1,201 points.

Source: Reuters