The market capitalisation of the Qatari bourse rose by a staggering QR153.21bn over the past year, but analysts say steps are required to ensure greater transparency.
The capitalisation now stands a little over the magical figure of $100bn (QR367.38bn).
But analysts say the trading sentiment on the bourse remains subdued despite strong market fundamentals and stress that there should be more transparency.
“The daily turnover in terms of trading value should be at least QR800m but it averages less than QR300m on any given trading day,” stock analyst Yasser Hassan told The Peninsula yesterday.
He said a strange phenomenon was being witnessed on the bourse (Qatar Exchange) for the past four months. “Some stock prices were suddenly going up one day without any justification and plummeting the next trading day,” he said.
“It is difficult to understand why this is happening. So what we need is greater transparency,” Hassan pointed out.
There is a liquidity crunch and institutional investors, especially portfolio funds, are not as active as they used to be before, said the analyst. The increase in capitalisation figures (from QR214.17bn by January-end 2009 to QR367.38bn as on January 31, 2010) was mainly due to new listings on the bourse, Qatar Exchange (QE).
Additionally, some banks and other listed entities enhanced their capital by announcing bonuses and rights issues. There weren’t many rights issues last year. Top among the new listings on the QE in 2009 were Vodafone Qatar, which launched an initial public offering (IPO) for the Qatari public, and Al Meera chain of cooperatives.
Currently, there are 44 companies listed on QE and many of them are large cap and prized entities, top on the list being Industries Qatar (IQ) and Qatar Telecom.
In the 12 months since January 29 last year which was a Thursday, the last trading day of the week, the 20-stock main index of QE rose merely 1,305 points.
The index stood at 5,253 as on January 29, 2009, while on January 31 this year it was over 6,558. The individual indexes of all the four counters (banking and financial services, insurance, industries and services) also climbed up in the period under review.
But the individual indexes of banking and financial services and insurance sectors took a beating compared to the figures of December-end 2009 and January this year, barely a month.
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