Tadawul performs worst in the region

Qatar’s stock index came slightly off a five-year low yesterday as local funds intensified their buying of those shares, while Saudi Arabia was the region’s worst performer.

The Doha index had recorded 11 straight sessions of losses, reflecting a lack of foreign investor confidence in a speedy resolution to the Gulf diplomatic crisis.

Local investors, however, have been net buyers for several weeks and yesterday they made up roughly three-quarters of the total market turnover, bourse data showed, helping lift the index 0.1 per cent higher.

Twenty shares rose including Qatar Gas Transport, which added 1.4 per cent, and 16 others declined, including Qatar Insurance, which lost 2.5 per cent. It had dropped 2.3 per cent on Monday after the company said it was closing its Abu Dhabi branch because it had not been able to obtain a licence.

In Abu Dhabi, Dana Gas rose 1.3 per cent ahead of a London High Court hearing on Monday and yesterday over the validity of its sukuk. Last week Dana dismissed a proposal from bondholders for a restructuring of the US$700 million Islamic bond. The main index added 0.3 per cent. In neighbouring Dubai, the index fell back 0.2 per cent, weighed down by profit-taking on some of the previous session’s top gainers.

The Saudi index fell 0.6 per cent as 10 of its 12 banking stocks declined including National Commercial Bank, which lost 1.5 per cent.

At a two-day meeting beginning late yesterday, the US Federal Reserve is expected to hold interest rates steady, with investors looking for clues on its anticipated pace of further tightening later this year and next. The market is pricing in an approximately even chance of a hike in December.

Most Gulf currencies are pegged to the dollar and any monetary policy change in the United States is usually mimicked by Saudi Arabia, the UAE and Qatar. A rate hike is considered positive for banks because it lifts their interest rate margins. Meanwhile, emerging stocks seesawed around threemonth lows yesterday and currencies were mostly flat, including Hungary’s forint which hit a two-month low against the euro the previous day in expectation of more monetary policy easing.