Qatar Shares Lead GCC Gains as Investors Hunt for Bargains

Qatar stocks advanced the most in more than five months, a day after they sank into a bear market, as oil advanced and investors bet the biggest four-day selloff in almost six years have pushed equities too low.

The QE index rose 3.1 percent, the biggest increase since July 1 to close at 11,460.02. The measure was the best performer among more than 90 gauges tracked by Bloomberg globally. The index trades at 12 times its 12-month projected earnings, down from 15 in September. The Dubai Financial Market General Index increased 0.1 percent, ending a nine-day losing streak.

“The drop has opened some phenomenal buying opportunities in the region,” Amer Khan, the Dubai-based senior executive officer at Shuaa Asset Management, said by phone today. “The valuations are very compelling.”

Stocks across the Gulf Cooperation Council area, which holds about a third of the world’s proven oil reserves, have plunged as oil heads for its worst year since 2008. Qatar’s benchmark index tumbled 23 percent from its September high through yesterday. Abu Dhabi, Saudi Arabia, Dubai, Kuwait and Oman also trade in bear territory.

Brent crude, which slumped to a five-year low last week after OPEC cut its forecast for demand in 2015 to the weakest level in 12 years, increased 1.4 percent to $62.69 a barrel at 12:34 p.m. in London.

Economic Forecast

Qatar National Bank, the lender with the biggest weighting on the index, led gains with a 5.3 percent jump, the most since July 1. Gulf International Services surged 9.9 percent.

The nation’s index yesterday sank 5.9 percent, the most since 2009, to 11,114.43, sending the measure’s 14-day relative strength index to 14.6, the lowest since March 2011. A level below 30 indicates to some analysts that securities have fallen too far. The rally today lifted the RSI to 24.9.

Qatar’s government expects economic growth to accelerate to 7.7 percent in 2015 from 6.3 percent this year, driven by growth in non-hydrocarbon activity, according to an e-mailed statement from the Ministry of Development, Planning and Statistics yesterday.

Still, the decline in oil prices will “affect fiscal revenues” and Qatar’s so-called break-even oil price may rise in 2015 and 2016, according to the statement.

Oil and natural-gas production contributes to more than half of Qatar’s gross domestic product, according to the U.S. Energy Information Administration. Qatar needs Brent to average $71.3 a barrel this year to balance its budget, according to Deutsche Bank AG.

Elsewhere in the region, shares in Kuwait added 0.4 percent, while Oman’s gauge fell 0.9 percent. Saudi Arabia’s Tadawul All Share Index declined for a seventh day. The main gauge for the biggest Arab bourse slipped 2.6 percent to 7,904.91, the weakest level since September 2013.

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