Global : The Doha Securities Market (DSM) continued to remain buoyant, with Global Qatari Market Index gaining 48% to <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />425 in 2004 and registered a robust YTD gain of 82% in the current year
Global Investment House – Qatar Economic & Strategic Outlook III- Doha Securities Market Peformance -Strong economic growth, buoyant crude oil prices, excess liquidity, opening of the market for foreign investors and growing corporate earnings were the major factors which staged a dramatic bull run at DSM during the year 2004 and in the current year so far. In May 2005, Global launched indices for Qatari stock market representing general market index and other sectoral indices, viz. Banking, Insurance, Industrial and Services. The general index is a market capitalization-weighted index and comprises of all the thirty one companies listed in the DSM (base year 1999). The Global DSM Index posted a yearly gain of 48% in 2004 and ended the year at 425. At the end of Nov. 2005, the Global DSM general index registered a whopping YTD gain of 82% to reach 775 points.
Stock Exchange Indices Performance
|
DSM Indices |
2003 |
2004 |
% Change |
Nov. end 2005 |
% Change over Dec. 2004 |
Source: Global Research
The major development of the year 2005 was the opening of the market for foreign investors. A law that allows expatriates and non-resident foreigners to trade on the Doha Securities Market from April 3 this year has been approved by the Emir of the country. The Minister of Economy and Commerce also made the announcement that once the bourse is opened up for trading to foreigners, they could seek entry to the boards of listed companies and become directors. In anticipation of this development the market started moving up significantly since the beginning of the year 2005, though the actual law came into effect from April onwards.
Keeping in line with the increase in the stock market indices, DSM also witnessed robust growth in trading activity. Trading activity as depicted by the value of shares traded witnessed a 97% surge in 2004, to reach QR23.1bn. This growth in trading activity continued to remain strong in 2005 as well. The value of shares traded swelled to QR94.6bn in the 11-months (Jan-Nov) of 2005. In 2004, the volume of shares traded also kept pace with the rising market. The volume of shares traded witnessed significant jump of 60.7% to 305.4mn shares. During the eleven months of 2005, the volume of shares traded grew 3 times over total volume registered in 2004. The total trading volume stood at 946.2mn shares.
In 2004, the market capitalization (m-cap) of DSM went up steeply by QR49.97bn a sharp jump of about 51% and stood at QR147.19bn. Apart from the buoyant stock market, the major reasons for this steep increase in m-cap are listing of two new companies and raising of capital by 11 companies during the year. At the end of Nov 2005 the DSM’s m-cap stood at QR313.4bn which shows a robust growth of 112.9% over 2004 year end level. During 9M of 2005, the aggregate earnings performance of the listed companies increased by about 42% over the corresponding period of the previous year. While the YTD gain of the market, till September 2005, was about 112%. Therefore, going forward we believe that the market will remain in a corrective phase for short term and it is better to adopt a cautious approach. However, we expect that it will continue to remain firm in the medium term to long term due to a mix of factors, prominent among them being the firm crude oil prices, increase in public expenditure by the government, etc.
