By Satish Kanady
DOHA: Qatar has overtaken UAE as the best-performing GCC market in terms of corporate earnings in the first quarter of 2015 (Q1, 2015). Driven by real estate sector, Qatar Exchange’s (QE) corporate earnings rose a robust 27.1 percent year-on-year to $3.6bn. The earnings of Qatar’s real estate sector surged 310.8 percent on YoY basis in Q1, 15.
The UAE was the best performing market in the GCC in 2014. Qatar outperformed it in Q1, 15, “GCC Earnings Review” released by Global Research yesterday noted.
Qatar’s first-quarter performance was attributed to strong growth in the Real estate sector’s earnings, which accounted for 30.7 percent of the consolidated earnings of the country.
“There was strong infrastructure growth in the country, led by construction development related to the FIFA 2022 World Cup. Though the FIFA World Cup came under scanner, the hosting still remains with Qatar, which would further boost Real Estate sector in the country”, analysts at Global Research said.
The real estate sector added 29.5 percent to the incremental earnings growth of Qatari bourse in Q1, 15. Among gainers, real estate was driven by a 12.3x increase in earnings of Barwa Real Estate, which contributed 302.1 percent to the earnings growth of the sector. This was partly ascribed to higher rental earnings and increase in capital gains. Ezdan Real Estate (13.4 percent) and United Development Company (8.5 percent) accounted for 6.2 percent and 2.1 percent respectively, of the sector’s incremental earnings growth. The increase in Ezdan Real Estate was ascribed to higher operating income ascribed to many big real estate projects and improving productivity.
On Qatar bourse, the Banks and Financial Services sector (8.5 percent) was driven by the heavyweight Qatar National Bank,accounted for 5.8 percent of the sector’s earnings growth. The bank’s earnings rose 11.1 percent YoY, led by 6.7 percent YoY growth in net interest income and 7.1 percent YoY growth in non-interest income. The increase in net interest income is on account of 8.9 percent growth in loans and advances, while non-interest income increased mainly due to higher fee and commission income. Masraf Al Rayan (18.1 percent) and Qatar Islamic Bank (19.4 percent) contributed 1.7 percent and 1.4 percent respectively, to the sector’s incremental earnings.
Losses in the Industrial sector (-15.4 percent) are mainly ascribed to the 40.0 percent YoY decrease in Industries Qatar’s earnings, which contributed 44.3 percent to the sector’s earnings. Decline in earnings in the Telecommunications sector (-40.9 percent YoY) has been ascribed to fall in Ooredoo’s earnings (-43.5 percent YoY).
Dragged down by Saudi Arabia, the GCC’s overall corporate earnings fell 3.3 percent YoY to $16.6bn in 1Q15. Along with Qatar, all GCC markets, except Saudi Arabia and Kuwait, posted first-quarter gains in corporate earnings. Down by 21.6 percent on YoY basis, Saudi contributed 9.4 percent to the accumulated fall in GCC’s earnings growth, partly offset by Qatar which added 4.5 percent to the incremental earnings growth.
Bahrain and UAE, up 8.9 percent and 6.6 percent , respectively, reported increased earnings. Kuwait, which was down by 2.8 percent, reported declined earnings. Oman’s earnings was almost flat.
The Peninsula
