Qatar Stocks Rise to 9-Month High Spurred by Bank Profit Bets

Qatari stocks rose to the highest level in nine months on expectations Qatar National Bank SAQ, the Middle East’s biggest lender, will report higher full-year earnings, boosting the outlook for the nation’s banks.

Qatar National, which will probably release results Jan. 13, surged the most since May 2011. Commercial Bank of Qatar QSC, the Persian Gulf country’s second-biggest bank, gained 1.7 percent. The Qatar Exchange Banking Sector Index rallied 1.8 percent, helping lift the benchmark QE Index 1 percent to 8,781.70, the highest level since April 12, at the close in Doha. The measure advanced 2.5 percent this week.

Qatar National “will kick off the Qatari earnings season on Sunday and the market is clearly pricing in a strong result,” said Akber Khan, director of asset management at Al Rayan Investment in Doha. “The rally today was all about banks, the sector that held the market back throughout 2012.”

The Doha-based bank, which said today it won approval to open a representative office in China, agreed to take over Societe Generale SA’s Egypt unit last month in a deal that will take its assets above $100 billion, a first for the Middle East. The lender’s 2012 profit probably grew 13 percent, according to the average estimate of 10 analysts on Bloomberg. Qatar National shares climbed 2.9 percent to 140.4 riyals today.

Dividend Yields

The lender missed profit estimates in the first three quarters of 2012, which contributed to pushing its stock down 5.3 percent last year. Banking industry shares lost 9.3 percent in the period, dragging the QE Index 4.8 percent lower. They also underperformed Gulf Cooperation Council peers as the Bloomberg GCC 200 Financial Index advanced 3.2 percent in 2012.

Qatar’s economy grew 6.3 percent last year, the slowest pace since 2003, according to data compiled by Bloomberg. Still, banks are boosting lending as the government undertakes more than $130 billion of investments to prepare for the 2022 soccer World Cup.

Commercial Bank of Qatar may post a 29 percent increase fourth-quarter profit, the fastest quarterly earnings expansion in two years, according to the median estimate of four analysts compiled by Bloomberg. Its shares gained the most since Sept. 16 to 75.8 riyals.

Investors are also showing “increased interest in banks in anticipation of dividend yields,” Bobby Sarkar, head of research at Doha-based Qatar National Bank Financial Services, said by phone. The QE Banking Sector Index has a dividend yield of 4.3 percent, compared with 3.11 percent for the Bloomberg GCC 200 Financial Index.

Al Ahli Bank QSC rallied 8.3 percent, the most since Nov. 1, to 56 riyals after the bank said Bahrain-based Ahli United Bank would sell 37.37 million shares in its Qatari affiliate to the Qatar Foundation.

Before it's here, it's on the Bloomberg Terminal.