Dubai : Banks in Qatar will be able to diversify their revenue base and bolster trading income as the government relaxes curbs on buying listed securities and allows banks back into brokerage operations, analysts said yesterday.
On Tuesday, the Qatar Central Bank said banks will soon be allowed to buy shares of listed companies on the bourse. Qatar's index rose 3.8 per cent yesterday on the news as banks and other bluechip stocks rallied.
Analysts said banks will be allowed to invest a maximum of 150 million Qatari riyals (Dh151.2 million) in listed securities on the Qatar bourse. Banks had been banned from trading on Qatar's markets since the government bought their share portfolios last year in an move to bolster capital.
"It is a positive move and should increase market sentiment overall. Banks now have the discretion to trade and that should boost their fee income," said Janany Vamadeva, banking analyst at HC Brokerage.
Shares rise
Shares of Qatar National Bank rose 7.4 per cent, while Commercial Bank of Qatar rose 2.2 per cent on the Qatar bourse.
"I think the largest banks in Qatar like QNB, CBQ will be the most to benefit. They are the largest banks in the country and have a lot of reach in the region, so they should be able to benefit from the move," said Dheeraj Lakhwani, investment analyst at Prime Emirates.
The Qatar government supported its banks in the financial crisis by buying 10 to 20 per cent of their listed capital and acquiring their investment portfolios to slow the impact of the crisis.
On Monday, the Qatar Financial Authority said it intends to issue licences to national banks to open brokerages. Banks in the region where previously prohibited from operating independent broking operations.
"Banks were not allowed to trade in the markets during the last three years and the move should allow them to diversify their revenue. They have the tools, reach, to grow their market-related fee income if they are allowed to tap the markets," said Sofia Al Boury, analyst at Shuaa Capital.
