Qatar Shares Rise to Three-Week High on Dividends, Earnings Bet

Qatar’s benchmark index rose to the highest level in three weeks, helped by the second-biggest dividend yield among Persian Gulf markets and bets public spending for the 2022 soccer World Cup will boost earnings.

Masraf Al Rayan (MARK), an Islamic lender, advanced for a third day. Al-Khalij Holding Co. (KHCD), a holding company with investments in manufacturing and cement, headed for the highest close since July. The benchmark QE Index (DSM) climbed 0.1 percent to 8,717.63, the highest intraday level since March 5, at 11:48 a.m. in Doha, trimming its loss this quarter to 0.7 percent. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the six- nation Gulf Cooperation Council, fell 0.2 percent.

The 20 companies listed on the index are trading at a dividend yield of 4.37 percent as of March 22, the second- highest rate in the GCC after Bahrain. The shares are trading at 10 times trailing earnings, compared with 19 times for companies listed on Dubai’s DFM General Index (DFMGI), the best performer among GCC markets this year.

“The dividend yield is high while the price-to-earnings ratio is low, with the potential for high growth in profits due to government expenditure to build infrastructure” to host the World Cup, said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities. Qatar, holder of the world’s third-largest natural gas reserves, plans to spend as much as $88 billion to host the event.

Masraf Al Rayan rose 1 percent to 27.50 riyals. Profit may rise to 1.47 billion riyals this year from 1.41 billion riyals in 2011, according to the estimates of Qatar National Bank Financial Services.

Al-Khalij Holding Co. climbed 2.2 percent to 16.60 riyals.

Dubai’s measure and Abu Dhabi’s ADX General Index (ADSMI) fell 0.2 percent. Oman’s MSM30 General Index slid 1.1 percent and Kuwait’s gauge dropped 0.2 percent. Saudi Arabia’s Tadawul All Share Index and Bahrain’s measure were little changed.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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