Qatar National Bank SAQ, the Persian Gulf nation’s biggest lender, jumped to the highest level on record as its chief executive officer was appointed finance minister of the world’s richest country.
The shares rose 1.9 percent to 159 riyals at the close in Doha, the highest since June 2003 and bringing the gain this quarter to 19 percent. That compares with an advance of 8.4 percent in the period for the benchmark QE Index. (DSM) Qatar’s new emir, who was handed power by his father on June 25, appointed CEO Ali Shareef Al Emadi as he formed a cabinet, Qatar News Agency reported yesterday.
This “shows the close connection of the government with the bank and reinforces” its position in the country, Jaap Meijer, the Dubai-based director of equity research at Arqaam Capital Ltd. said by phone today. “They are well connected with the public sector, and the public sector is where you have seen the biggest growth.”
Qatar, the world’s richest country by per capita income, plans to spend $200 billion over the next decade on projects including a rail and metro system and a new port before it hosts the 2022 soccer World Cup. Deposits from government-backed savers and lending to state-backed borrowers helped boost profit at Qatar National Bank, with 2012 net income rising 11 percent.
The bank has grown to be the region’s biggest, with assets of more than $100 billion, helped by political ties as well as acquisitions in Egypt and the United Arab Emirates and investments in Syria. During 2012, the bank purchased stakes in Iraqi and Libyan lenders and in March 2013, it bought the Egyptian unit of France’s Societe Generale SA (GLE) for $2.45 billion.
Qatar National Bank’s full-year profit will probably climb 13 percent to 9.44 billion riyals ($2.59 billion), according to the mean estimate of 13 analysts on Bloomberg. The bank has a 12-month dividend yield of 3.8 percent, compared with 2.8 percent for National Bank of Abu Dhabi PJSC, the U.A.E.’s biggest lender.
Qatar’s upgrade to emerging market status from its frontier ranking by MSCI Inc. (MSCI) earlier this month will help attract foreign funds and acquisitions are helping improve return on equity, Meijer said. Thirteen analysts recommend investors buy Qatar National Bank shares, while two have a hold rating on the stock, according to data compiled by Bloomberg.
Qatar’s former Emir, Sheikh Hamad Bin Khalifa Al Thani, who stripped his father of the title in a 1995 coup, handed power to his son, Sheikh Tamim Bin Hamad Al Thani, saying the moment for new leadership in the world’s biggest exporter of liquefied natural gas had arrived.
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