Overlooked Qatar Shares May Surprise On The Upside

Qatar stocks have been overlooked this year during a boom in some neighbouring Gulf markets, but new financial reforms and attractive valuations could pave the way for a rebound.

Concerns about the slow pace of Qatar’s massive infrastructure building programme has weighed on the Doha stock market this year.

Trading volumes have also dropped significantly since mid-June with the summer lull kicking in and initial earnings reports presenting a mixed picture for investors.

Qatar National Bank, the Gulf Arab state’s largest lender by market value, this month posted a 16.7 percent jump in second-quarter profits, matching forecasts. Qatar Islamic Bank missed estimates, reporting a drop in net profit.

Trading is likely to be muted as Ramadan, the Muslim month of fasting, begins over the weekend but could pick up soon after.

Qatar announced on Wednesday financial reforms and relaxed trading rules that could boost sentiment although they will take time to come into effect.

Valuations are also attractive.

Qatar’s benchmark stock index is trading at a price to earnings multiple of 8.7 times, while Saudi Arabia’s is at 11.70 times and Dubai’s is at 9.8 times.