Qatar's stock market could break above its recent trading range as soon as next week if global markets, still vulnerable to the euro zone debt crisis, do not fall sharply, analysts say. The Qatar market, reopening on Wednesday after long Eid holidays, climbed 0.9 percent to 8,705 points. In the week before the holidays, it had risen above its September peak of 8,520 points, viewed as an important barrier by many investors.
Traders said strong economic growth in Qatar, high oil prices and robust performances by the country's banks were fuelling interest in the market, which could increase if the eurozone began to make headway in resolving its crisis. "The 8,520 level had been holding the index down for the past six months but now the 8,850 level is in sight, and there is potential to even go beyond that target," said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. The 8,850 point area is where the index peaked in April this year.
Industries Qatar, Masraf Al Rayan, Nakilat and Qatar National Bank have been bought in recent trading days. These companies posted strong quarterly earnings over the last few weeks.
Qatar National Bank surged 1.6 percent on Wednesday to finish at 148 riyals, its highest closing price this year. Late last month it broke above a symmetrical triangle formed by its highs and lows since May - a bullish technical signal which targets the 160 riyal area. Samer al-Jaouni, general manager of Middle East Financial Brokerage, said: "You could do well buying Qatar even though prices are higher than other markets...It's justified because we're expecting growth and higher dividends."
Any rally in Qatar could be cut short, however, by a worsening of the euro zone crisis and signs that global economic growth is deteriorating further. United Arab Emirates markets were the only other Gulf bourses to resume trading on Wednesday; others will reopen next week. The Dubai index rose 0.4 percent but trading volumes generally stayed low, showing sentiment remains fragile.
One positive sign on Wednesday was the performance of Abu Dhabi developer Aldar Properties, which rose 1.9 percent in active trade after it reported slightly better-than-expected third-quarter profits before the holidays. The company posted a profit of 144 million dirhams for the quarter compared with a net loss of 731.2 million dirhams a year earlier; analysts had on average predicted a profit of 139.8 million dirhams in the latest quarter.
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