Qatar’s benchmark index rose to the highest level more than in three weeks, helped by the Persian Gulf’s second-biggest dividend yield and bets World Cup-related public spending will boost company earnings.
Masraf Al Rayan, an Islamic lender, advanced the most since March 8. Al-Khalij Holding Co., a holding company with investments in manufacturing and cement, rose to the highest level since July. The benchmark QE Index climbed 0.3 percent to 8,726.50, the highest since March 1, at the close in Doha, trimming losses this quarter to 0.6 percent. Oman’s MSM30 Index fell 1.5 percent, the most since August, as BankMuscat SAOG fell after the central bank cut interest rates on personal loans.
The 20 companies listed on the Qatari 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, 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 2022 soccer 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 1.5 percent to 27.65 riyals. Profit may climb 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 2.5 percent to 16.65 riyals.
Saudi Arabia’a Tadawul All Share Index fell less than 0.1 percent at 3 p.m. in Riyadh. The Bloomberg GCC 200 Index, which tracks the biggest 200 companies in the six-nation Gulf Cooperation Council, was down 0.3 percent.
Dubai’s measure fell 0.8 percent and and Abu Dhabi’s ADX General Index lost 0.4 percent. Kuwait’s gauge dropped 0.2 percent while Bahrain’s BB All Share Index fell 0.1 percent.