Qatar Exchange on an upswing Wednesday, 01 September 2010 06:05

DOHA: Qatar’s index has been looking upwards. It ended at a three-month high yesterday with a marginal eight-point rise to 7,226.

Analysts say they expect the market to remain buoyant except for corrections that might punctuate what they see as a steady climb.

They cite a sudden gush of liquidity into the Qatari bourse (Qatar Exchange) as one of the main factors behind the buoyancy.

“Owners whose land had been acquired by the government for public use have been paid and much of the funds — running into millions of riyals — have been pumped into QE,” said an analyst.

The other factors that keep the Qatari stock market surging much against regional and global trends are the lowering of overnight deposit facility by Qatar Central Bank by 50 basis points to 1.5 percent, and robust economic growth.

With liquefied natural gas (LNG) and its long-term supply contracts fuelling Qatar’s economic growth, the trading climate is becoming conducive by the day due to the low risk, say analysts.

The country is gearing up to celebrate the soon-to-be-achieved 77 million tons annual LNG production target and growth in real gross domestic product is already tipped to cross 14 percent this year.

“These indicators bode well for the flow of foreign investment into the country as well as for stock trading,” said an analyst.

Banking stocks have been doing exceptionally well backed by growing profits. Banks’ lending activity is also picking up. Petrochemicals and metals giant Industries Qatar (IQ) remains one of the large cap and prized stocks with Nakilat.

Analysts say that since the stock market has not been doing so well since the onset of the global recession, the time for a welcome turnaround has arrived.

THE PENINSULA

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