Qatar's stock market fell sharply on Thursday as all but one of its stocks slid, while all major Gulf bourses also tumbled, mostly pressured by financial shares. Qatar's index, one of the world's best performing markets last year, fell 1.7 percent with 19 of its 20 stocks declining. Market heavyweight Industries Qatar dropped 1.9 percent and Middle East's largest lender Qatar National Bank was down 1.6 percent. Qatar's stocks have run ahead of fundamentals due to the increase in foreign ownership limit in some companies, which led to a huge passive inflow into the stock market, said Sanat Sachar, equity research analyst at Al Mal Capital.
Investors are now looking to allocate money to other regional markets like Saudi, Kuwait, and Egypt that offer better valuations along with some short term catalyst, Sachar added. In October, Qatar saw an additional $1.5 billion flowing into its stock exchange after increasing its foreign ownership limit to 49 percent, the Gulf country's stock exchange market development director Mohsin Mujtaba had said. United Development Company plunged 6.8 percent to its biggest intraday loss since March after its full-year profit fell to 501 million Qatar riyals ($137.62 million) from 538 million riyals a year ago.
In Dubai, the index lost 0.6 percent, with all its real estate stocks dropping. The emirate's largest listed developer Emaar Properties dropped 2.7 percent, while its unit Emaar Development lost 3.7 percent. DAMAC Properties was down 3.8 percent.
Emaar Development, Emaar Malls and DAMAC's share performance over the past year sets them up for exclusion from the MSCI Emerging Markets Index in May under the compiler's criteria for membership, which has been weighing on these stocks. DXB Entertainment lost 3 percent after saying its Six Flags theme park in Dubai had been put on hold as the financing for the project was no longer available.
The move is the latest sign that the Gulf's leading tourism and commerce hotspot is being buffeted by an economic slowdown in the region triggered by lower oil prices and geopolitical tensions. DXB Entertainment suspending its expansion has caused investors to reduce their exposure, while DAMAC is down on profit-taking, said Tariq Qaqish, MD, Asset Management Division, Mena Corp Financial Services, Dubai.
The Abu Dhabi index was also down 0.6 percent, led by a 10 percent slump in Waha Capital. The investment firm reported a full-year net profit of 145 million dirhams, down from 425.9 million dirhams year ago; it also proposed a 2018 cash dividend of 7.5 percent, down from 15 percent in 2017. Saudi Arabia's index lost 0.2 percent, with Al Rajhi Bank falling 0.4 percent and Savola Group shedding 2.7 percent.
Egypt's blue-chip index fell 0.1 percent as country's biggest lender Commercial International Bank dropped 0.5 percent after four straight sessions of gains.
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