Qatar National Bank shares declined to the lowest level in more than three weeks as investors awaited details on the potential purchase of Societe Generale SA’s stake in an Egyptian unit.
The shares of the Middle East’s biggest lender by assets retreated 0.7 percent to 134.7 riyals at the close in Doha, the lowest since Sept. 16. The QE Index was little changed.
“While in the long term it might be value accretive, most investors are waiting to see what price might be paid for National Societe Generale Bank if a deal transpires,” said Julian Bruce, the Dubai-based director of institutional sales trading at EFG-Hermes.
Shares of QNB are set to surge more than 50 percent if a deal is concluded, JPMorgan Chase & Co. said in a note yesterday, with the stock of the Doha-based bank potentially reaching 207 riyals. QNB received approval from Egypt’s central bank on Sept. 13 to begin due diligence on the 77.2 percent stake in Cairo-based NSGB. The shares of the Qatari bank lost 0.2 percent since, while NSGB has climbed 9 percent.
The potential transaction “is still in a gray area in which traders stay watchful rather than speculate positively toward the reaching of an agreement and due diligence findings,” said Talal Touqan, head of research at Al Ramz Securities LLC in Abu Dhabi. The deal may also be “fraught with political aspects, such as the regulatory framework, taxes, the cost of takeover and a currency risk,” he said.
Third-quarter profit at QNB, which missed out to OAO Sberbank in its bid to buy Dexia SA’s Turkish unit Denizbank AS, increased 11 percent on higher lending. Ten analysts recommend investors buy the shares, while one has a hold rating, according to data compiled by Bloomberg.