Qatar Stocks Jump Most in World as MSCI Selloff Lures Buyers

  • Investors see value after biggest decline in 3 mos. on Monday
  • Monday's selloff due to technical reasons: Quantum Investment

Qatar stocks rose the most in the world as investors speculated Monday’s selloff was overdone.

The QE Index closed 4.4 percent higher in Doha, the biggest increase in almost a year, as 687 million riyals ($189 million) worth of shares traded. That’s more than double the market’s daily average in the last three months. Qatar National Bank’s 5 percent increase was the biggest contributor to gains. The lender accounts for about 15 percent of the nation’s benchmark stock gauge.

The rally reversed losses from Monday’s selloff, which was spurred by MSCI Inc.’s decision to cut Qatari companies’ weighting in its emerging-markets index. The re-balancing came as trading volumes had slumped amid an equity selloff across the six-nation Gulf Cooperation Council as the price of Brent crude sank. Governments in the region rely on income from energy to fund public spending, one of the biggest drivers of economic growth.

“What happened yesterday was that traders re-balanced their weightings in certain stocks due to MSCI’s changes,” Montasser Khelifi, a Dubai-based director of advisory at Quantum Investment Bank Ltd., said by telephone. “This created a good entry point for investors into companies such as QNB, because the selloff was due to technical reasons and not because of the companies’ fundamentals”

The market’s bounce boosted its 14-day relative strength index out of oversold territory for the first time in three weeks. The QE Index rose to 10,535.05 points, while QNB climbed to 168 riyals on almost 4 times its average daily volume in the past three months.

MSCI’s latest adjustments to its indexes were effective as of Monday’s close.

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