13 Mar 2018 - 1:19

QNB announcement buoys Qatari stocks

By Satish Kanady / The Peninsula

DOHA: Qatari stocks surged 4.97 percent, reversing declines in the earlier sessions, after QNB announced its decision to seek shareholder approval to increase non-Qatari share ownership limit, yesterday. The upbeat market announcement helped push the benchmark index up to gain 410.38 points to 8,663.04, the biggest leap in 15 months.
In a heavily traded session, QNB hit the 10 percent daily limit and sent the banking sector index hurtling higher to finish at 6.23 percent higher. The bellwether Industries Qatar (IQ) also surged 10 percent.
QNB Group yesterday stated that it was intending to recommend to the Extraordinary General assembly of the bank, to approve increasing the percentage of non-Qatari ownership in the company’s capital to 49 percent, instead of 25 percent, subject to the approval of the concerned regulators.
“An Extraordinary General Assembly will be convened to present and approve the proposed amendment to QNB’s Articles’ of Association by adding an agenda item in respect of the above after securing the appropriate regulatory approvals of the proposed amendment,” the bank said.
“This is a positive move in line with what certain other listed companies have done already this year. This is good news for the market as it will increase the inflow of funds from global markets into Qatar,” Omar Mahmood, Partner, Head of Financial Services. KPMG in Qatar told The Peninsula.
Investors broadly bought equities with 30 of the 43 companies trading higher. Industrials, banks, and real estate led the benchmark index up. Industrials stock Qatar Electricity and Water 8.71 percent. Among the real estate stocks, Ezdan led the pack by surging 8.37 percent. Barwa advanced by 6.09 percent.
“Qatari companies are raising foreign ownership limits to attract foreign capital… As much as $730m in passive inflows are expected to Qatar National Bank if the limit is increased..”, Bloomberg quoted market experts as saying.
Rami Jamal, portfolio manager at Amwal told Reuters that raising the ceiling was likely to increase -- possibly almost double -- QNB’s weighting in emerging market equity indexes, eventually causing new flows of passive funds into the stock.
Jamal noted that the Qatari market had pulled back sharply, leaving valuations relatively attractive, after the passing of Qatar’s annual dividend system earlier this year; QNB shares were down nearly 17 percent from their peak in January.
“The market already had good conditions for a rebound when the QNB news came,” he said.