32.8 C
Doha
Wednesday, October 28, 2020

Qatar’s economy continues to recover as stock market sees a 21% surge

-

Qatar Stock Exchange has marked a huge turnaround since March, witnessing a rise of 21 percentone of the highest growths in the region.

After the country’s QE index has seen its lowest level of the year on March 9, closing at 8,310, the number has risen exceptionally this month to 10,000, an outcome experts say, is thanks to supportive policies by the government and other stakeholders. 

At the beginning of the year, the country’s economy had been greatly affected by rising COVID-19 cases and falling oil prices, hitting many investors with big losses. However, shortly after, the QE index slowly started to get back on its feet.

“Shares had fallen to multi-year low in March and April due to COVID-19 outbreak and falling oil prices. Investors were taken aback  by the pandemic but gradually their confidence was restored after the government announced measures to support equity market. The low prices in March-April also created investment opportunities for investors. After realising the effect of COVID-19 on economy was less than anticipated, the investors started pouring money into shared again,” said Ahmed Akl, Doha based financial analyst. 

Read more: ‘Resilient’ Qatar maintains stable outlook despite obstacles, Moody’s says.

In addition to the growth levels, the QSE’s market capitalisation also registered a growth of 31 percent, jumping from QR455bn on March 9 to QR597bn on Monday.

 

The robust growth in Qatar’s stock market has surpassed other regional ones, with its index closing at 10,056 on October 12. Since March 9, Abu Dhabi’s General Index moved from 4039 to 4532 points, marking a growth rate of 12 percent. In addition, the Dubai Financial Market General Index  registered only a 7.5 percent growth during the same period. On the other hand, Oman’s MSM 30 Index registered a fall of around 4.9 percent in the same timeframe. 

Read more: Qatar real estate transactions top QR4 billion in August alone.

“During COVID-19, companies’ performance was comparatively better than corporate in other countries. The corporate earnings in Qatar declined around 20 percent in the first half of the year, which is comparatively less than corporate earnings in other countries. Qatar was also assigned stable ratings by global rating agencies, even in these difficult times, which has increased investors’ confidence in Qatari market and economy,” said Akl.

One of the many governmental efforts that helped boost confidence in the Qatari market despite COVID-19 struggles is the QR10bn support package the government released for Qatar’s capital market back in March. This, along with other financial factors, contributed to Qatar’s market revival. 

Going forward, experts say that the third-quarter results will determine the course of action for the stock market. 

“Technically speaking, 9950-10000 level is an important support level for the market, if it is not breached then we can see market moving up to 10200 -10400 range,” said Akl.

Just last month, Moody’s Investors Service, a leading provider of credit ratings, research, and risk analysis, said that Qatar’s unsecured debt rating is at Aa3 with a stable outlook, despite the pandemic. The rating  were pinned on Doha’s resilience in the face of obstacles, including a temporary decline in oil prices and geopolitical tension, Moody’s said.

Follow Doha News on Twitter, Instagram, Facebook and Youtube

 

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Related Articles

Most Read

Subscribe to Doha News below!

To be updated with all the latest news, offers and special announcements.