Qatar Stock Exchange sees profit-taking after strong rally

Doha, Qatar: The Qatar Stock Exchange (QSE) experienced profit-taking last week and early this week, following eight consecutive weeks of growth, according to Ramzi Qasmieh, Investment Manager at Qatar Securities Company. 

The index, which has climbed 8.9 percent since the start of the year, saw some top-performing stocks lose momentum after hitting their highest levels in more than three years.

“This profit-taking was expected,” Qasmieh told The Peninsula in an interview, noting that it came as part of a “gradual, rather than sudden, price correction.” He emphasised that Monday’s trading session was particularly affected by activity in Industries Qatar, which was not eligible for its first-half dividend payouts, further influencing investor sentiment.

Despite the correction, sector performance remained uneven, with banking and financial services leading the market. The sector rose 3.54 percent this week, while the transportation sector posted gains of 2.87 percent. Qasmieh attributed the strong performance of banks to robust foreign fund inflows.

“Foreign funds made evident purchases of bank shares, considering the quality of these banks’ assets and their profitability levels, along with the appealing valuations of their share prices in comparison to those of banks in the region,” he said.

“While Gulf markets have overall seen a mixed performance in recent months, the analyst highlighted that investor confidence in the QSE has strengthened. 

“The Qatari Stock Exchange has not had its share of increases over the past two years, unlike the markets in the region and the world, he said.

Qasmieh said, “With the improvement of macroeconomic indicators, and the Qatar Investment Authority taking more than one initiative to improve trading, I believe the performance of the stock exchange has become more profound and less volatile over the past two months.”

He pointed out that interim cash dividends, combined with corporate actions and new cash inflows, have further supported market resilience.

When asked about sector valuations, Qasmieh accentuated that investors should evaluate companies based on fundamentals rather than looking for over- or undervaluation across entire sectors. “There are no specific sectors. Investors should consider revenue growth, profit quality, profit margins and their direction, the degree of risk and volatility in results, stock liquidity, and the ability to exit smoothly,” he said. 

However, the expert mentioned that price-to-earnings ratios of banks as well as some industrial and telecom companies remain attractive. 

He stated, “Investors should take into account the rising valuations with the expected reduction in interest rates.”

Looking ahead, Qasmieh stressed that geopolitical factors and global monetary policy decisions will play a decisive role in shaping the short-term outlook for the QSE. 

“The performance of regional markets in general, including the Qatari stock exchange, is contingent on geopolitical developments in the region, in addition to the US Federal Reserve’s decisions regarding interest rates,” Qasmieh said.

He also remarked that a number of Qatari companies have begun pursuing international expansion opportunities, particularly in markets such as Syria, where firms are investing in vital infrastructure and development projects.

The analyst further added, “These moves reflect a growing appetite among Qatari companies to diversify revenue streams and capitalise on emerging opportunities abroad.”