Qatari banks and financial companies, which represent the largest sector exposure within the fund’s portfolio, reported a 12.9% year-on-year growth in net profits to US$1.1bn.
The Q2 review by its investment adviser highlights how the IMF expects Qatar’s real GDP growth to reach 6% in 2012, a forecast which is not only the highest in the MENA region but it also tops the emerging market average of 5.2% projected by the HSBC global economics team.
But the report also stated that the performance of all the major GCC markets was muted during Q2 2012 after reporting gains during the previous quarter.
“The Qatar market declined 7.6% from March 2012 levels, while Saudi was the worst performer during the quarter, with a near 16% decline. The GCC market sell-off can be attributed to a dismal global market outlook, which has substantially curbed investors’ risk appetite.”
However, on a more positive note, the fund’s investment adviser added that the recent PwC Capital Markets Watch GCC report noted that GCC initial public offering (IPO) activity picked up in Q2 2012, with capital raisings totaling about US$1.1bn. This was the strongest quarterly IPO performance in the last two years.
During Q1 2012, Qatari banks and financial companies reported a 12.9% YoY growth in net profits to US$1.1bn, compared with US$0.9bn reported a year earlier. The banking and financial sector accounted for 44.3% of the total profit reported by the listed universe.
All the eight banks reported a growth in their Q1 2012 results. While the Al Khalij Commercial Bank’s earnings grew a modest 2.1%, the Qatar Islamic Bank profits grew a robust 20.9%. The capital adequacy ratio (CAR) of Qatar’s banking sector was at 20.6% in 2011.
Dominant market player, Qatar National Bank reported 17.4% YoY growth in net profit to QAR2bn (US$0.6bn), during Q1 2012. The report stated: "The bank has benefitted from loan growth at home, led by a rise in spending on infrastructure including roads, petrochemical plants and an airport. The bank maintained its CAR at above 20% and non-performing loans (NPL) as a percentage
of total loans and advances remained consistent at around 1%, confirming its high quality lending portfolio.
It further stated that Banks in Qatar have increased lending, driven by rising government spending on infrastructure including an urban redevelopment project, new port, rail system and petrochemical plants, and that it "remains bullish on the sector, as growth in the nearterm should be well underpinned by the government’s public sector spending program, including investment in infrastructure, health and education and the additional growth potential from investments on the FIFA World Cup in 2022."
The Qatar Investment Fund invests in quoted Qatari equities listed on the Qatar Exchange (“QE”) (formerly the Doha Securities Market) in addition to companies soon to be listed, with a possible allocation of up to 15% in other listed companies elsewhere in the GCC region.
