DUBAI: Qatar’s bourse booked its largest one-day drop in four months yesterday as investors took their cues from weak global markets to sell shares ahead of a huge IPO planned by a new state investment firm in May.
The Qatar Exchange benchmark broke support on the March low of 8,450 points and retreated 100.17 points or 1.18 percent to 8,381.03 points, its lowest close since December 31 and its biggest one-day percentage loss since January 15.
The volume of shares traded up to 5.78 million from 3.3 million on Thursday, and the value of shares increased to QR181.81m from QR139.25m on Thursday.
Among the top losers were Industries Qatar whose share dropped 2.47 percent to QR153.80, Commercialbank lost 0.16 percent to QR64, Qatar Islamic Bank fell 2.72 percent to QR68 and National Leasing was down 2.51 percent to QR32.95.
The banking and financial sector lost 0.86 points, the insurance sector was down 1.19 points, the industrial sector dropped 1.92 points and the services sector fell 0.54 points.
Stocks tied to global energy demand lead declines. Industries Qatar retreated 2.5 percent and Qatar Gas Transport (Naqilat) fell 2.1 percent. All except three firms lost ground in the 20-stock main index.
Qatar under-performed other Gulf markets because of the plan by Doha Global Investment Co, backed by assets from the sovereign wealth fund, to offer shares to the public in May.
It is expected ultimately to hold about $12bn of assets, raising $3bn from its initial public offer of shares on the Qatar Exchange. “Locals have been selling some of the names to free up cash for the new issue by Doha Global,” Shehada said. Officials have said the company plans to guarantee a 5 percent dividend in its first year.
The promise of solid returns from Doha Global appears to have distracted investors from betting on the first-quarter earnings of existing listed companies.
Commodities sold off globally on Friday, while world equity markets fell after a dour reading of US consumer sentiment and poor retail sales reinforced fears of a weak US economy that would hurt global growth. Brent crude lost $3 a barrel on Friday to hit a eight-month low.
“Sentiment was shot down on the back of the drop in global equities and commodities - there is mixed selling from locals and foreigners, with a migration of cash from equities to fixed income,” said Ahmed Shehada, head of trading at Qatar National Bank Financial Services.
Reuters/QNA
