Banking and industrial sectors raise QSE by 112 points; municipal capitalization increases by QR6.05 billion

Strengthening global oil prices and expectations of an early interest rate cut by the US Federal Reserve were reflected in regional stock exchanges, including the Qatar Stock Exchange (QSE), which closed the week higher. The banking and industrial sectors saw higher-than-average demand as the 20-share Qatar Index rose 1.12% this week, prompting QNB and QIIB to outline their strategies for offering half-yearly dividends to shareholders. Domestic institutions were increasingly interested in net buying on the main exchange this week, prompting Kamal Naji, chief economist at Qatar Financial Centre, to see Doha’s gross domestic product growing by 2% in 2024, with the near-term outlook expected to remain stable. The half-year dividend policy of QatarEnergy-owned companies and the announcement by QNB and QIIB, as well as expectations that others will follow suit, had a positive impact on the market this week. Foreign nationals became net buyers in the main market this week, with global rating agency Standard and Poor’s publishing a report stating that the market capitalization of QNB and Qatar Islamic Bank increased by 2.7% and 1.4%, respectively, in the second quarter of 2024 compared to the first quarter of the same year. Weakened net profit reserves of the Gulf institutions weighed on the main exchange this week, with Qatar ports posting the second highest monthly container handling rate in June 2024, surpassing 144,000 TEU (twenty-foot units), up 51% compared to the same period last year. Lower net selling by local retail investors weighed on the main market this week, with the Qatar Financial Centre Purchasing Managers’ Index showing that Doha’s non-energy economy signalled strengthening demand in June, posting its fastest growth in almost two years. The weakening bearish grip of local individuals played its part on the main bourse this week, with the Qatar Producer Price Index, which measures the average change in the price received by domestic producers for their output, rising 2.24% year-on-year in May this year. However, foreign funds were seen as net sellers on the main market this week, with a total of 0.4 million QATR exchange-traded funds sponsored by Masraf Al Rayan worth QR0.84 million across 66 deals. Individual Gulf investors were increasingly net sellers on the main bourse, with a whopping 0.06 million QETF exchange-traded funds sponsored by Doha Bank worth QR0.53 million across 44 deals. The Islamic index gained less than other indices in the main market this week, where the banking and industrial sectors together accounted for about 59% of total trading volumes. Market capitalization rose by QR6.05 billion or 1.05% to QR581.08 billion, led by large and mid-cap segments this week, which saw no trading in treasury bonds. Trading volumes and turnover fell this week in the main market, which saw no trading in treasury bills. In the venture market, trading volumes and turnover rose this week, which led Edaa to change the foreign ownership limit in Aamal Company to 100% of equity. The total return index rose by 1.12%, the all-equity index by 1.12% and the all-Islamic securities index by 0.93% this week, leading Fitch to affirm Qatar Islamic Bank’s credit rating at “A” with a “stable” outlook. The Banks and Financial Services Index rose 1.76%, the Industrial Index 1.68%, and the Consumer Goods and Services Index 0.9%, while Transport fell 1.47%, Real Estate (0.65%), Telecom (0.3%), and Insurance (0.25%) this week. The main gainers in the main market were Widam Food, Zad, QIIB, Inma Holding, Qatar Islamic Bank, QNB, Mannai Corporation, Baladna, Mekdam Holding, Al Faleh Educational Holding, Qatar National Cement, Industries Qatar, Gulf International Services, Mesaieed Petrochemical Holding, Qatar General Insurance and Reinsurance, and Al Khaleej Takaful. In the venture capital market, Al Mahhar Holding shares gained value this week. However, Qatar Cinema and Film Distribution, Mazaya Qatar, Qatari German Medical Devices, Qatar Oman Investment, Milaha, Masraf Al Rayan, QLM and Nakilat were among the players that supported the main bourse this week. Net buying by domestic funds increased noticeably to QR161.81 million compared to QR158.93 million in the week ending June 27. Foreign individuals became net buyers of QR11.84 million compared to net sellers of QR12.89 million in the previous week. Net profit of Gulf institutions fell significantly to QR62.37 million compared to QR99.65 million in the previous week. Net selling by local individuals weakened significantly to QR72.61 million compared to QR85 million in the week ending June 27. Net selling by Arab retail investors fell significantly to QR5.76 million compared to QR7.76 million in the previous week. However, foreign institutions were net sellers of QR29.09 million compared to net buyers of QR46.86 million in the previous week. Gulf individuals’ net profit reserves rose sharply to QR3.49 million compared to QR0.29 million in the week ended June 27. Arab institutions’ net sales rose slightly to QR0.34 million compared to QR0.18 million in the previous week. The main market saw a 10 percent decline in trading volume to 608.89 million shares, a 14 percent decline in value to QR1.88 billion and a 10 percent decline in transactions to 69,348 this week. In the venture market, trading volume increased almost fourfold to 11.38 million shares and value increased by 67 percent to QR17.78 million, while transactions shrank by 58 percent to 298.