GCC stock markets mostly witnessed broad-based gains during June 2020, in line with global benchmarks, with all regional stock markets barring Oman closing in the green. Qatar’s benchmark index was up by 1.74 percent m-o-m, driven by the positive performances of Real Estate (+8.6 percent) and Telecom (+5.11 percent) sectors.
Kamco Invest’s GCC markets monthly analysis noted regional market volatility witnessed a steep decline during the month, as investors preferred to stay cautious over concerns of the impact of Covid-19 crisis.
Moreover, despite consecutive monthly gains, markets remained in the red at the end of 1H-2020 at -15.7 percent YTD ,as the 12 percent rally during Q2-2020 was unable to offset the 25 percent decline during Q1-2020.
The GCC monthly sector performance chart showed the broad-based gains with almost all the sectors in the green, barring insurance that receded 1.3 percent. The transportation index witnessed the biggest monthly gains as prospects of near-term opening of economies pushed the most affected sectors over the past few months including consumer cyclicals, real estate, industrials and basic materials higher.
That said, in terms of 1H-2020 gains, only the defensive consumer facing sectors like Food & Beverage and Consumer non-cyclicals were in the green, whereas financials services showed the biggest declines. The QSE-20 index was down by 13.7 percent YTD at the end of June 2020. The Qatar All Share index which maps the broader market, declined by 9.4 percent, as sectoral performance for H1-20 was negative.
In Qatar, Insurance and Consumer Goods & Services indices were the main laggards during the first half of 2020, as they declined by 27.9 percent and 15.6 percent respectively.
The Banks & Financial Services index was down by 7.5 percent YTD, while Telecoms and Real Estate witnessed lower declines over the same period at 3 percent and 5 percent respectively.
For the month of June, however, the QSE-20 index was up by 1.74 percent m-o-m, driven by the positive performances of Real Estate (+8.6 percent) and Telecom (+5.11 percent) sectors. Insurance was the worst performing index, witnessing a decline of 5.2 percent for the month of Jun-2020.
Ratings agency Moody’s affirmed the long-term deposit rating of Qatar Islamic Bank (QIB) at “A1”, with a “stable” outlook and mentioned that the rating reflects the bank’s adequate capital buffers, good profitability and limited market-funding reliance, underpinned by its established and growing retail and corporate Islamic banking franchise. In ratings action, AlKhaleej Takaful Insurance mentioned that S&P affirmed its BBB rating and kept the outlook as stable.
The affirmation is reportedly ascribed to better operating performance than the average for the company’s domestic & regional peers, and limited impact on the company from the covid-19 pandemic. S&P global reportedly indicated its expectations that the company will continue to generate profitable earnings & maintain capital adequacy at AAA. Milaha has announced a reorganization of the company in line with Milaha’s strategy to expand services for its core customers in the marine and logistics sectors and develop local capabilities to support Qatar National Vision 2030.
As part of the re-alignment, the existing Maritime & Logistics pillar will focus on enabling trade and providing end-to -end supply chain solutions for commercial customers, through its Container Shipping, Ports and logistics. Four out of Milaha’s five strategic pillars will focus on our core-business pillars, (1) Maritime and Logistics, (2) Offshore Marine, (3) Gas & Petrochem, and (4) Marine & Technical Services.
The fifth pillar, Milaha Capital, will deal solely with financial and real estate investments. Trading activity was up during June as value traded increased by 47.6 percent m-o-m, to reach QR8.62bn as compared to QR6.12bn during May-2020, while volumes traded increased by 40.9 percent to reach 8.6billion shares in Jun-20, as against 3.5billion shares in the month prior.
The Banks & Financial Services sector was the most active in terms of value traded during the month Jun-2020, accounting for 35.5 percent of the total value traded, followed by Real Estate and Industrials sectors, as they accounted for 21.7 percent and 17.3 percent of the total value traded respectively. In terms of trading activity, QNB topped the monthly value traded chart with QR1.05bn worth of shares traded, followed by Ezdan Holding and Qatar Gas Transport recording QR947m and QR408m in monthly value traded.
Dlala Brokerage was the top performing stock in the index for the month as its share price almost doubled (+93.2 percent). Salam International Investment followed with gains of 51.6 percent m-o-m. On the other hand, shares of Qatar Insurance witnessed the most declines, losing 9.3 percent m-o-m. Qatar National Cement & Mannai Corp followed with declines of 4.9 percent and 4.8 percent for the month.
