Qatar stocks surge on World Cup win
Market up nearly four per cent as Gulf nation pledges to invest in infrastructure and transport for 2022 tournament.
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| The feel-good factor from Fifa’s announcement spread to the stock markets on Sunday [Najad Abdullahi] |
Qatar stock market rose to its highest close in two years on the first day of trading after football’s governing body Fifa announced that the small Gulf nation would host the 2022 World Cup.
The Qatar Exchange index rose over seven per cent at opening, and although it fell during the day, it still closed 3.57 per cent up at 8,477.32 points, according to the market’s website.
All shares on the bourse ended positive, with banking and infrastructure stocks being the biggest gainers.
Taha Abdel Ghani, the general manager of Nama Economic Consulting, said that getting the World Cup tournament had “raised investors’ confidence in the Qatari market.”
“There are huge sums of money that Qatar has pledged to spend within a set period of time. This helps investors to expect the direction of capital flows during the next 10 years,” he said.
Infrastructure investment
Qatar has pledged to build a sophisticated transport network, including an underground metro system, and many new hotels, in addition to the air-conditioned stadiums where the games will be held, before the tournament takes place.
About $3bn will be invested in the stadia alone for the 2022 tournament.
Shares in real estate firm Barwa closed up 6.19 per cent on Sunday, while National Cement shot up 8.47 per cent. Qatar National Bank was up 4.5 percent, Commercial Bank of Qatar 3.93 per cent, and Rayan Bank 5.52 per cent.
“After the initial knee-jerk reaction (up), there was some profit-taking before the market gradually rose,” Shakeel Sarwar, the head of asset management at Securities & Investment Co (SICO) in Bahrain, said.
“Developed markets are closed, but foreign investors should come in tomorrow so short-term traders probably built positions ahead of tomorrow’s opening.”
Gas-rich Qatar, which has never qualified for the World Cup finals, will be the first Arab nation to host the tournament and other markets in the Middle East also saw the benefit of the feel-good factor from its success in Sunday’s trading.
Egypt bounce
In Egypt, Orascom Construction Industries (OCI) gained 4.1 per cent as investors speculated that it might win contracts in Qatar.
About $10 million of shares in OCI changed hands on Sunday, making it the most active stock on the Egyptian Exchange.
“Qatar’s World Cup deal is the name of the game,” Omar Darwish of CIBC Brokerage said.
“It’s driving OCI up four per cent on very good volumes as they are expected to be awarded more contracts in Qatar.”
The Egyptian stock exchange closed up by 1.1 per cent at 6,726 points, with 12 stocks making gains.