Shares of index heavyweights on Qatar Stock Exchange (QSE) shot up yesterday, on the back of the 1:10 stock split. Ahead of stock splits to be effective later this week, big banks QNB and QIB jumped 3.76 percent and 2.36 percent, respectively.
Shares of Commercial Bank gained 1.26 percent after its stock split became effective yesterday. The shares closed up QR4.80 on the volume of over 1.35 million shares against the previous session’s 38,339. The traded value rose to QR6.56m from 1.84m. QFB, another stock which faced the stock split effective yesterday, however edged down by 1.86 percent. QFB’s trading volume rose to QR7.5m from QR6.84m.
QSE’s 20-stock benchmark index climbed 2.02 percent or 207.77 points to finish at 10,503.55, outperforming the regional markets. Foreign institutional investors were the net buyers. Earlier in the day, market experts said the Index remains inside the downtrend channel but now is negotiating its position against its moving averages. Successful breakout above the 10,300 would lead the Index to the 10,600 level.
The QSE’s total traded volume jumped by nearly 198 percent to 31.17 million shares from the previous session and the traded value surged by 144 percent to QR476m. Analysts said trading volume jumped as more investors traded.
“Market performance today was excellent, where investors realised the technicalities of the stock split and quickly adjusted for it. This drove investors to allocate more to the market especially the index heavy weights”, Talal Samhouri, head of Asset Management, Amwal told The Peninsula.
The rationale behind QSE’s stock split is to improve the liquidity of equity shares with higher floating stocks and to make the equity shares more affordable to the investors. Among the sector indices Banking and Financials advanced the most by 2.61 percent, followed by Industrials. Bellwether Industries Qatar (IQ) appreciated 2.53 percent.
‘‘All Mena markets have come back strong from the Eid break. The Global lead has been positive but the local factors are also supportive,” Reuters quoted Vrajesh Bhandari, senior portfolio manager at Al Mal Capital as saying. “Qatar is sharply ahead on local retail accumulation as we go through the 1:10 stock split,” said Bhandari. The 10-to-one stock split for companies on the exchange is being phased in from June 9, aiming to boost liquidity by encouraging smaller investors to buy shares.
QSE yesterday announced it has already implemented the split of three more stocks, effective today. They included Qatar Oman Investment Company, Dalala Brokerage and Investment Company and Al Khaliji Commercial Bank.
