DOHA: Margin trading brought in an estimated QR3m to Qatari stock market yesterday; the first day the local bourse introduced the method of buying shares that involves borrowing a part of the sum needed from the broker. The ‘market response is very encouraging’ was the immediate response from Qatar Stock Exchange (QSE) authorities.
“This is very positive. Now just one brokerage firm has opened account for executing the trade. We expect more companies to open their accounts in the coming months. The volume is expected to go further up,” Rashid Ali Al Mansoori, Chief Executive Officer, QSE said in an informal chat yesterday.
QSE’s total traded volume jumped to 6.08 million yesterday from the previous session’s 5.3 million shares. Vodafone led the volume. Benchmark index slipped 0.14 percent to finish the week at 10,357.33. The index fell 0.75 percent in the past week compared to the previous week.
Al Mansoori expressed the hope that this new service would enhance the stock market performance and stimulate trading volumes going forward. The QSE, after finalising the procedures of launching the margin trade on Wednesday, allowed the brokerage company The Group to execute margin trading yesterday.
At least two other firms are expected to open their accounts in the coming months.
Banking, QSE’s biggest sector, is being pressured by declining liquidity with some banks grappling with capitalisation issues. Corporate earnings of a sample of listed companies for H1, 16 had shown a drop of 12 percent compared to a year ago, the biggest decline in the region. QSE hopes that introduction of margin trading, also called as buying on margin, will help create the market liquidity in a big way.Regional market had a negative to low impact on the heels of Opec’s decision to cut outputs during the last week of September. “A tough September for regional markets and the average monthly loss of 2pc means that they will start the new quarter on the back foot. Any attempts to close the year on a positive will depend on how October price action responds to a new wall of worry where oil price finding a new high is offset by declining regional fundamentals (especially in Saudi) and a spooked global environment going into the US November general elections”, analysts at Al Masah Capital said.
