Analysts for Al-Sharq: The fourth quarter is exceptional and prominent for listed companies

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Analysts for Al-Sharq: The fourth quarter is exceptional and prominent for listed companies

November 29, 2022 at 7:00 a.m

Syed Mohammed

Financial analysts expected an improvement in the results of the Qatar Stock Exchange during the last quarter of this year, supported by the strong performance of the national economy, which is expected to achieve a growth rate of 5.2%, with exceptional levels of surplus, either at the level of the balance of trade or the balance of payments . Analysts in an Al-Sharq analysis said listed companies will have an “exceptional and prominent fourth quarter” of the year, as companies are expected to witness exceptional profits for some companies that have benefited from hosting the World Cup, such as telecommunications companies , service and food companies and real estate companies. Hospitality, restaurants and others, and such companies and their sectors will make good profits and benefit from this important event, and this will support the gross product as well, which strengthens coping with the recession, promotes the return of funds and improves the performance of the company. The banking sector will also witness good results, especially in light of expected strong results in the fourth quarter, and population growth will increase the activity and movement of the economy. Therefore, the upcoming future is better, and investors should choose companies with good results and strong financial solvency.

Turn off returns

Investor and financial analyst Youssef Abu Haliqa, in an interview with Al Sharq, said that the general index of the Qatar Stock Exchange, although it fell by about 29.46 points or 0.25 percent yesterday, managed to stop a series of declines that extended to 7 sessions the day before yesterday, in which it lost about 6.4 percent To close down 0.58%, at 11,897 points, after approaching 12,000 points during the session, before losing some of its gains. Abu Haliqa added that what marked the session was the recovery of most speculative stocks and their making good gains, after a series of declines that started from the beginning of the month, including investments, which topped the list of stocks with the highest growth and maximum limits the day before yesterday, amid trading of around 38.5 million shares, and Gulf Takaful stock also achieved a 4.3% gain supported the performance of the index, Al-Tijari and Al-Rayyan stocks, as they supported the index by around 57 points, after it pressed in the current week’s sessions, with the financials index up 0.82% by the end of the day before yesterday and the industrials index up 0.7% with gains in Limited to Industries shares, while Ooredoo shares continued to fall for the second session in a row, losing more than 5.5% in terms of liquidity. Trading values ​​improved compared to previous sessions and reached approximately 522 million riyals, with the acquisition of QNB, Istithmar and Al Rayan sharing 46% of them. Abu Haliqa adds that despite the pressure on the index, the shares of 11 companies rose at the session yesterday, while the prices of the other 30 companies fell, and 4 companies kept their previous closing prices. The market capitalization, at the end of the trading session, was 663 billion and 430 million and 355 thousand and 851,390 riyals, compared to 664 billion and 255 million and 215 thousand and 278,780 riyals, in the previous session.

an exceptional quarter

Financial analyst Ahmed Akl said that the specter of recession, whose features have begun to appear in many world economies, remains far from the Qatari economy, which improves the performance of the stock market, despite the negative psychological impact on traders at the present time with the effect of high interest rates that banks offer to funds, and thus his exit from the financial markets. In an interview with Al-Sharq, Akl added that there are global pressures on stock exchanges, financial markets and many other investment tools, but the most important issue in this period is the issue of American benefits, and today the raising of American interest. levels after it reached the level of 4% became very attractive to investors with expectations of an increase. In the coming period, between 4.5 and 5%, and therefore such high interest rates, along with stories about the coming recession, there is an attractive alternative possibility for investors to transfer their money from the financial markets to bank deposits, and therefore it is possible to wait for some time while the vision do not clarify and avoid risk in business sectors.

Ahmed Akl noted that this issue has driven, in the recent period, some capital movements, especially in emerging markets, which we have seen facing great pressures on this issue, and even some developed markets have been affected by it. Therefore, the interest rates offered by banks, which range between 4 and 5 percent, are a factor of pressure on listed companies in general, and require them to pay dividends higher than the stated rates in order to attract investors, emphasizing in this context, We need attractive rates profits distributed to shareholders.” , which is relatively difficult, given the need for these companies to retain part of their profits, with the aim of promoting quick cash and financing their projects, in order to avoid high borrowing costs.

The financial analyst explained that what is happening in the world today in terms of the movement of capital towards bank deposits on most stock exchanges, directly and indirectly affects the Qatar Stock Exchange, because these are psychologically attractive movements, considering the interdependence of international markets. Today, we can expect a fateful challenge for companies at the end of the year, and they will have two options. The first option is to satisfy its shareholders with profitable dividends, which are dividends that are often compared to bank interest, taking into account the percentage of risk that exists and in the light of the current situation. % in order to be attractive or acceptable to shareholders at the end of the year. , and the second option at the same time these companies are facing the problem of high interest and therefore many prefer to keep part of the funds until they are distributed in the next year either for expansion or to pay any other obligations, thus avoiding the cost of borrowing and interest, which are became high and cost companies a lot. Here it will be clarified whether companies have the ability to distribute dividends in a satisfactory manner to their shareholders compared to the benefits of banks.

Mr. Akl explained that these challenges affect the movement of capital and make it different, especially in emerging markets, where we have recently seen some portfolios sold in the Qatar market and other markets, and we do not forget that the coming period will witness special pressure factors for international companies, or that have global subsidiaries, as we saw the impact of oil prices, which fell below 80 dollars per barrel for the first time since the recent price increases, all these are influential and pressure factors in the markets.

External factors

Regarding the performance of the stock market during the current week, a financial investor, Mr. Tariq Al-Muftah, said that the Qatar Stock Exchange index is in the process of building new support points during this period, noting that it is expected to consolidate above the 12,000 point level during the coming period. , while waiting for the outcome of external factors that influenced the stock market. overall performance of the index. In an interview with Al-Sharq, Al-Moftah said that investors in the stock market are in a state of convergence, similar to other investors in different world markets, which indicates that there is a decline in these markets, especially the American one. , can be explained by the ambiguities surrounding the US central bank’s decision to increase the interest rate.

He explained that expectations point, at a time when everyone is waiting for the interest rate increase to be in the range of 50 basis points, to the possibility of raising it to a level between 75 and 100 basis points, given that the US employment data confirms that the US economy will not enter into a state of recession, which encourages the Federal Reserve to take a more aggressive decision to contain the level of inflation. Al-Muftah added that the decline in oil prices in global markets also cast a shadow over the recent declines in the Qatar Stock Exchange, but the decline will not last long and the market will benefit from the quarterly results, especially with the hosting of the World Cup in Qatar and its large revenues that are estimated at around 17 billion dollars, we are optimistic and do not worry about this decline, which is an opportunity to correct positions and build investment positions for the coming period.

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