Qatari stocks tumbled nearly 4 per cent on Monday, its sharpest daily fall in more than nine months, as traders took money off the table ahead of its inclusion in the FTSE secondary emerging market index.
The Qatar exchange index closed 3.97 per cent to end at 10,152.77, its intraday low, registering its sharpest one-day fall since January 17. Major telecom and transportation shares ended with sharp losses of more than 5 per cent with banks losing nearly 3 per cent.
“Investors were in a risk off mode. Qatar was more of buy on rumour, and sell on fact story. Qatari stocks were trading at rich valuations and that was caused by the run-up of its inclusion in the FTSE emerging market index, so now since that is happening, we are seeing local investors exit.” Saleem Khokhar, head of equities at National Bank of Abu Dhabi’s asset management group told Gulf News over phone.
The index had gained as much as 19 per cent in the run-up of the gauge’s inclusion in the FTSE’s secondary market emerging market index, which will be effective from Tuesday.
“I’m bit of surprised at the extent of the hit that we are seeing in Saudi Arabia. There are still concerns on the banking sector on the non-performing loans side, and that is concerning the investors,” Khokhar said.
Saudi Arabia’s Tadawul index closed 2.05 per cent lower at 5.935.96. Going ahead, Credit Suisse expects more downside risks to Qatar and Saudi Arabia stocks. “We would stay away for now and wait for a better entry opportunity,” Fahd Iqbal, Head of Middle East Research at Credit Suisse said in a report emailed on Sunday.