Qatar's Stocks Set for Best Week Since Spat Began

  • U.S.’s Tillerson makes second Doha visit in bid to end crisis
  • Country’s biggest lender advanced each session this week

StanChart Says Qatar Markets Performing Well

Qatar’s main stock benchmark produced its best weekly performance in almost 18 months amid expectations that a dispute with its neighbors is drawing closer to an end, and after the country’s biggest bank delivered earnings that pleased the market. 

The index gained 2 percent in Doha, bringing its weekly advance to 6.1 percent, the most since January 2016, with Qatar National Bank QPSC contributing most to gains. U.S. Secretary of State Rex Tillerson is visiting the Qatari capital on Thursday for the second time this week as he seeks to broker a solution to the worst political crisis among Gulf Arab monarchies.

The index is approaching the level it traded at before a group of countries led by Saudi Arabia severed commercial and diplomatic ties with Qatar last month.

Below are the views on Qatari equities of Rami Jamal, a portfolio manager at Amwal LLC in Doha, which oversees around 1 billion riyals ($270 million) in assets, including the Qatar Gate Fund, which outperformed equity fund peers in the past year.

Is this recovery temporary?

We wouldn’t consider this a temporary recovery. Although prior to the sharp decline that took place in June due to current geopolitical tensions, many managers were debating whether the Qatari market reached its fair value post the second phase of the FTSE inclusion.

Who is buying the stocks?

We observed significant buying momentum from local retail and institutional investors, that was a major contributor to the recent rally, coupled with major economic announcements related to the northern gas fields and the recent positive development in the geopolitical tensions. On a fundamental level, Qatar National Bank announced very positive results for the second quarter of 2017, which added to investor confidence.

READ: Qatar’s Biggest Bank Turns to Asia to Offset Saudi-Led Spat

Are Qatari assets trading at attractive levels?

Relatively speaking, yes, as the Qatar Index is currently trading at a discount compared to regional and emerging-market indices. However, we must look at the listed Qatari companies on an individual basis to find which companies offer the highest potential return.

Do you see the rally lasting for the upcoming sessions?

We believe it should. Investors have been positioning themselves in selected names in anticipation of positive second-quarter results. Furthermore, positive geopolitical developments will add to investor confidence.

READ: Investors Buoy Qatar Assets as Tillerson Tries to Mediate

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