Qatar shares ease as FTSE Russell emerging market status nears

Added 1st September 2016

Share prices in Qatar have weakened after global index provider FTSE Russell named the 22 Qatari companies that will be included in its Secondary Emerging Market Index, when it upgrades Qatar from ‘Frontier‘ status later this month.

Qatar shares ease as FTSE Russell emerging market status nears

However, the falls were more of a retreat after Qatar’s main stock index rose around 14% over the past three months in anticipation of its arrival into the developing nations index.

On Thursday morning the Qatar stock index had fallen nearly 1% adding to the sharp fall of 2.9% recorded on Wednesday, which was its biggest one-day drop since January.

Nick Wilson, chairman of the Qatar Investment Fund said further profit taking was possible given the run up in ahead of the announcement which has seen over $200m (£151.9m, €179.5m) of net inflows into the market from other Gulf Cooperation Council (GCC) nations and foreign institutions.

“Technically the market is a bit ahead of itself so we can expect some volatility until the new index is effective,” he said.

Oil impact

The FTSE Russell announcement was also not the only factor affecting the Qatar Stock Exchange (QSE) with the sharp fall in oil prices another factor affecting sentiment.

On Wednesday, oil fell sharply following the latest US crude stockpile data. The US crude price tumbled 3.56% to post it biggest daily decline since July 13th and in the process closed below $45/bbl for the first time in three weeks.

The formal re-classification of Qatar to Secondary Emerging from Frontier will be completed when markets open for business on 20 September. Qatar has already been upgraded to emerging markets by MSCI and Standard & Poor’s-Dow Jones.

The Qatari companies eligible for the FTSE Secondary Emerging Market Index are: Aamal, Al Meera Consumer Goods Company, Barwa Real Estate, Commercial Bank of Qatar, Doha Bank, Ezdan Holding Group, Gulf International Services, Industries Qatar, Masraf Al Rayan, Medicare Group, Ooredoo, Qatar Electricity & Water Co., Qatar Gas Transport, Qatar Insurance, Qatar International Islamic Bank, Qatar Islamic Bank, Qatar National Bank, Qatar Navigation, Qatari Investors Group, Salam International Investment, United Development Company and Vodafone Qatar.

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Richard Hubbard

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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