Doha’s index extends gains to move close to this month’s record high as investors target stocks that will be included in MSCI’s emerging market index.
MSCI will upgrade Qatar, along with the United Arab Emirates, from frontier market status at the end of this week, adding 10 Doha-listed stocks to its emerging market benchmark.
Masraf Al Rayan will be Qatar’s lead stock in the index, accounting for about a quarter of the country’s weighting; the Islamic lender’s shares are up 4.8 per cent.
Industries Qatar and Qatar Electricity and Water, which MSCI will also add to its emerging market index, rise 2.2 and 1.2 per cent respectively.
“It’s the positive momentum from the MSCI upgrade,” says Robert Pramberger, acting head of asset management at Doha-based investment company The First Investor.
“The performance so far this year has been driven by retail and institutional investors, with some index trackers already coming in, and that will continue for the next one to two weeks.”
UAE markets are closed on Sunday for a national holiday, which has made Qatar the focus of regional investors’ attention, Pramberger adds.
Doha’s index rises one per cent to 13,142 points, taking its 2014 gains to 26.5 per cent; it is within 55 points of May 13’s all-time, intra-day high.
“Q1 results were in line with expectations, but it’s also about the outlook – Qatar has a lot of infrastructure spending going on,” says Pramberger, citing state-led road, rail, hotel and property projects ahead of the country hosting the 2022 soccer World Cup.
“This is getting priced in – oil and gas money is flowing back into the country through infrastructure.”
Qatar’s stock market has provided much better returns than other asset classes, including bank deposits, real estate and fixed income, Pramberger notes, which has further reinforced positive investor sentiment towards local equities.