Doha: Qatari equities are expected to see positive boost in the current and next year driven by the FIFA World Cup Qatar 2022, said QNB Financial Services (QNBFS) in a report.
Qatari equities are in an investment sweet spot benefiting from unique tailwinds. High oil and gas prices, significant net foreign investment flows given Qatar’s status as a safe haven/FOL (foreign ownership limit) increases, the upcoming FIFA World Cup Qatar 2022 and game-changing LNG expansion provide meaningful drivers for the Qatar Stock Exchange (QSE).
“We could witness a positive boost to Qatari equities in 2022 and 2023, driven by the FIFA World Cup, primarily from construction, real estate, tourism and retail spending that trickles down to the exchange-listed companies and the broader economy as a whole. Qatar’s objective is to use the event as a springboard to showcase its offerings, and hopefully boost international tourist arrivals from 2.1 million in 2019 to 6 million per year by 2030,” the report said.
The report also discussed about the previous seven (excluding outlier Brazil) FIFA World Cup host markets. “2022 has been an extraordinary year with global stocks markets bearing the brunt of global central banks’ retrenchment of quantitative easing as they attempt to fight inflation without sending their economies into a recession/stagflation. Qatari equites have not been immune, as the QSE Index appreciated as much as 24.7 percent (April 11, 2022), but then declined to almost flattish territory in late June and is now again up by 12.1 percent YTD (September 5, 2022),” it added.
The QSE Index remains a relative outperformer among most major regional markets. Thus, “we note that these drivers could be largely priced into the market but should provide the Qatar Stock Exchange Index with high-quality catalysts that help grow or stabilise the market despite the overall prevalent global risk-off backdrop,” the report noted.
QNBFS report further said, “As the world looks forward to an amazing show and experience in Qatar, empirical evidence suggests a positive impact the FIFA World Cup will likely have on the Qatar Stock Exchange in the near-term. While markets tend to fall in the first three months immediately after the World Cup, returns 12 months after the event are positive, outperforming the MSCI World Index by an attractive 4 percentage points.”
