Middle East markets: Qatar shares slump

Qatar's index slumped to a 2011 low on Thursday as a fourth day of unrest in neighbouring Bahrain and uncertainty over when Cairo's bourse will re-open in post-Mubarak Egypt weighed on equities. "Revolution in Egypt was shrugged off too easily by Gulf markets," said Hashem Montasser, managing partner at Frontlane Capital, a Dubai-based asset management firm.
"Markets were mispriced in the sense that risk premiums have gone up, but equities prices didn't reflect that. Bahrain has become the catalyst to now re-price Gulf equities." Bahraini police stormed a protest camp in central Manama on Thursday, killing three people in a swift move to prevent protesters from emulating Egyptians whose Tahrir Square protests helped topple former president Hosni Mubarak. "Geopolitical concerns in the Middle East are weighing on sentiment, but investors can distinguish between North Africa, Egypt and the Gulf," said a Qatar-based analyst who asked not to be identified.
Qatar's index fell 1.3 percent to 8,703 points, its lowest finish since December 30. "The market may test support at 8,500 points, but it is stable and should remain sideways until companies finish paying dividends," said Hani Girgis, assistant chief dealer at Dlala brokerage. "After Egypt and now Bahrain, investors are a little afraid of what will happen in the region. Investors are waiting for the Egypt exchange to re-open." Commercial Bank of Qatar dropped 2.8 percent, Barwa Real Estate lost 1.4 percent and Qatar National Bank fell 2.9 percent.
The latter is down 8.2 percent since the central bank ordered conventional lenders to halt Islamic operations by the end of 2011. Few details have since emerged on how banks will comply and this uncertainty will weigh on shares, said Dlala's Girgis. Bahrain's measure rose 0.6 percent, but less than 48,000 shares change hands, the lowest level in at least two years, with investors largely absent.
The benchmark was down until the final minutes of trading, when a few thousand shares in National Bank of Bahrain were bought, pushing its stock up 8.8 percent. NBB's shares were earlier down 1.5 percent. Three other stocks traded. Ahli United Bankfell 0.6 percent, while Khaleeji Commercial Bank and Seef Properties ended flat. The cost of insuring Bahrain's debt against default rose to fresh 18-month highs.
"Bahrain has heightened risk for at least the next couple of months," said Frontlane's Montasser. "As risk premiums rise, equity values should fall. Part of valuing any company is looking at the risk profile associated with its cash flow." Egypt's bourse has been shut since January 27, and its re-opening has been postponed three times.