Qatar Index Jumps 410 PTS on QNB Foreign Ownership Move

Press release
Published March 13th, 2018 - 09:56 GMT
QNB, the largest lender in the Middle East and Africa by assets, jumped its maximum daily limit of 10 percent after the announcement.
QNB, the largest lender in the Middle East and Africa by assets, jumped its maximum daily limit of 10 percent after the announcement.

The Qatar Stock Exchange (QSE) main index on Monday witnessed its biggest jump since January 2016 after Qatar National Bank (QNB) announced its plan to increase the percentage of non-Qatari ownership in its capital to 49 percent from 25 percent.

QNB, the largest lender in the Middle East and Africa by assets, jumped its maximum daily limit of 10 percent after the announcement. 

The QSE main index surged 410.38 points, or 4.97 percent, to close at 8,663.04 points. This is the biggest leap witnessed by QSE since January 19 when the main index had rallied 5.5 percent. 

The announcement by QNB to increase foreign ownership limit (FOL) meant that index trackers, especially the international investors who track the emerging market (EM) indices, will increase their allocation to Qatar mainly in QNB, Amwal Asset Management Head Talal F Samhouri told Qatar Tribune. 

This in turn will give the chance for a larger turnover of other stocks, since sellers of QNB will have to recycle their proceeds to other Qatari stocks, Samhouri said. 

"The increase also was due to the lower valuation of the Qatari market compared to other GCC markets. The market already had good conditions for a rebound when the news about QNB's plans came. It will attract active investors as they usually look for liquid markets," the fund-manager said. 

"We expect other companies to follow suit and increase the FOL," Samhouri said. 
Commenting on the recently listed exchange traded fund (ETF) on the Qatari bourse, he said,"Today, the QETF proved that it can be a close resemblance to the whole market. This shows that owning the market though the QETF can be advantageous."

According to another market expert, raising the ceiling was likely to almost double QNB's weighting in emerging market equity indexes, eventually causing new flows of passive funds into the stock.

The financial analyst forecast that QNB's stock price would rise to QR140 and QR145 over the coming sessions. The bourse would see an upward trend in the coming period boosted by QNB's announcement, the financial analyst said.

QNB's announcement also had a positive impact on several stocks such as Industries Qatar and Zad Holding as they too surged the maximum daily limit of 10 percent. 

The liquidity of the bourse witnessed a huge surge to QR871.54 million from QR125.22 on Sunday, while the trading volume rose to 17.87 million shares from 5.36 million in the previous session.

Vodafone Qatar's stock, which advanced 1.8 percent, led the bourse in terms of trading volume with 3 million shares, while Qatar Navigation's stock, which levelled up 1.52 percent, topped the market in terms of liquidity with QR136.7 million.

Source: Qatar Tribune

Background Information

Qatar Stock Exchange

Established in 1995, the Doha Securities Market (DSM) officially started operations in 1997. Since then the exchange has grown to become one of the leading stock markets in the GCC region.

In June 2009, Qatar Holding, the strategic and direct investment arm of Qatar Investment Authority (QIA), and NYSE Euronext, the world’s leading exchange group, signed an agreement to form a major strategic partnership to establish the Exchange as a world-class market. The DSM was renamed the Qatar Stock Exchange on the conclusion of the deal.

The primary aim of the Qatar Stock Exchange is to support Qatar’s economy by providing a venue for capital raising for Qatari companies as part of their corporate strategy and giving investors a platform through which they can trade a variety of products in a transparent and efficient manner. The Qatar Stock Exchange also provides the public with access to market information and ensures correct disclosure of information.

Qatar National Bank

Qatar National Bank (QNB), established in 1964 as the country’s first Qatari-owned commercial bank, has an ownership structure split between the Qatar Investment Authority (50%) and the private sector (50%).

QNB has steadily grown to be among the largest banks in the region and is by far the leading financial institution in the country, with a market share approaching 40% of banking sector assets.

QNB offers a full range of Retail, Corporate, Investment, Treasury, Wealth Management, and Islamic Banking products and services for individuals, corporate institutions and government entities in Qatar as well as internationally.

QNB has the largest distribution network in Qatar, comprising 44 branches and offices (including 3 mobile branches), in addition to 12 Islamic branches and offices operated by QNB Al Islami, and more than 160 ATMs.

QNB was the first conventional bank in Qatar to offer Shari'a-compliant banking products and services through QNB Al Islami, established in 2005.

QNB’s international presence is rapidly expanding to include new locations around the world to supplement the long established branches in London and Paris.  Currently QNB has presence in 23 countries including branches in Yemen, Oman Kuwait & Singapore as well as Representative Offices in Iran & Libya. An Islamic branch was recently inaugurated in Sudan, offering a full range of Islamic banking services and products.

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