Qatar markets strengthened Monday, with the country-specific exchange traded fund testing its long-term moving average, as investors jumped on companies set to hand out dividends.
The iShares MSCI Qatar Capped ETF (NasdaqGM: QAT), the lone Qatar equity-related ETF, rose 2.7% Monday and broke above its long-term, 200-day simple moving average.
Qatar’s equity market surged Monday, outperforming the rest of the region for a second day as investors dived into dividend-paying stocks ahead of distributions, reports Andrew Torchia for Reuters.
“A number of stocks look set to continue the rally during 2018, especially as some now have more than 6 percent dividend yield”, Akber Khan, Senior Director-Asset Management Group, Al Rayan Investment told The Peninsula.
Qatari companies are known for their high dividend yields and are set to announce fourth-quarter or annual dividends in the next few weeks. Furthermore, yields are expected to be higher this time around after the drop in stock prices in response to the economic embargo imposed by its Arab neighboring states.
QAT shows a 4.16% 12-month yield. However, the ETF typically distributes a sizable dividend in June.
Qatar’s equity markets have recovered to within 10% of its pre-embargo levels after plunging 22% at one point.
The financial sector or largely bank stocks were leading the charge Monday, with trading volume on the Qatari stock index almost doubling. QAT also includes a significant 52.7% tilt toward the financial sector, followed by 15.6% industrials and 13.3% real estate. Top holdings include Qatar National Bank 21.2%, Industries Qatar 10.7%, Masraf Al Rayan 10.5%, Ezdan Holding 7.1% and Qatar Insurance 5.2%.
Further supporting Qatar’s market outlook, crude oil prices have been strengthening, with Brent hovering around $67.7 per barrel. The economy seems to be on stable ground even after being subject to an embargo by its neighbors.
“Qatari GDP surprised to the upside in 3Q17, suggesting that the diplomatic dispute had a less severe initial impact on activity than previously feared…. GDP growth rebounded to 1.9 percent year-on-year from 0.3 percent in Q2, despite being the first full quarter of the diplomatic dispute that began in early June,” NBK noted in its latest country report on Qatar.
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