DOHA: Stock analysts and corporate circles do not expect a major correction to take place on the Qatari bourse at least over the short-term.
They cite a number of factors that they insist should keep the market stable, if not quite buoyant, over the days to come.
Companies have reported robust financials for the first half (H1) of this year, and then Ramadan is over and the long summer break is about to end after which trading should pick up, say some analysts and corporate figures.
“I think from September the main index that basically reflects investor behaviour should maintain an upward trend,” said Nasser Al Khaledy.
CEO of Qatar-Oman Investment Company, a listed entity, Al Khaledy told this newspaper he expected more liquidity to flow into Qatar Exchange (QE) in September.
“I think that due to the emerging market status having been conferred on the QE by MSCI, the market should look up. I, therefore, don’t expect any major correction to punctuate that trend until at least early 2014.”
The main index of the QE closed at 9,847.62 on August 7, the last trading day before Eid Al Fitr holidays began. The market reopens today after the Eid break amidst high investor expectations.
“We shouldn’t be surprised if the index breaches the psychological barrier of 10,000 points sometime in September itself,” said Al Khaledy.
This will not be the first time, though, that the index would breach the 10,000 points barrier.
The 20-share benchmark index had dizzied up to 10,671 points in mid-January 2008, and the QE was then known as the Doha Securities Market (DSM).
And, in early April 2005 after the DSM was thrown partly open to foreign investors, the index had even breached the 11,000 points barrier and had closed at 11,148.30.
However, according to Al Khaledy, by early next year there are chances of the index breaching that barrier of 11,000 and even 12,000 points and the latter would be a record.
That might happen during the excited run-up to the time (May 2014) when the QE actually gets the emerging market status.
Some analysts say that they wonder how the QE index has been going up when liquidity indicators such as trading value remain stable at around QR300m, the daily average, and sometimes even less.
The index, they argue, needs a new positioning as it might not be reflecting the actual performance of stocks, especially after sector indices were recently introduced.
“I think that the main index needs a bit of new positioning and should take into consideration the expanding investor base as well, aside from other key indicators like share price and performance and capitalization,” argues Al Khaledy.
One analyst who didn’t want his name in print said the main benchmark sensitive index is based on 20 most highly liquid stocks, so doesn’t show the movement of smaller shares.
But stock analyst Bashir Al Kahlout disputes that argument and says that every six months those 20 shares are reviewed and some four to five are replaced based on their performance in that period. “So, I think there is no problem with the main index.”
The Peninsula
