Collective decline in profits of companies listed on the Qatar Stock Exchange

Shares of listed companies on the Doha bourse fell 7.8% by the end of the first half of this year. Analysts considered Qatar’s economy to be shrinking, with expectations of continued declines in corporate performance as a result of negative conditions in Qatar’s economy.

It was notable that the transport sector was the top loser with a 32.4% decline as the profits of the shipping company dropped by 52%, followed by services and consumer goods by 22%, while the financial services sector grew by 1% Amounted to 6%.

According to the data, the profits of listed companies in the Qatari stock market declined during the first six months of this year to about 20 billion riyals, compared to 21.7 billion riyals during the corresponding period last year.
The net profit of Industries Qatar, which operates in petrochemicals, fertilizers, iron and steel, declined by 19% during the first half of 2017 compared to the same period in 2016. The net profit for the period ended 30 June 2017 was QR 1.6 billion, By 19% compared to the same period of 2016, with an EPS of QR 2.66, compared to QR 3.29 per share for the same period last year. This decrease is due to a 17% decline in revenues compared to the first half of 2016, On the decline in sales volumes in most operating segments.

Commenting on the performance of the largest listed companies in the Doha market, Osama Al-Ashri, member of the Association of Technical Analysts & ndash; Britain, «Industries Qatar» is a joint stock company listed on the Qatar Exchange, and the national oil company in the state «Qatar Petroleum» is the main contribution, 51% of the capital, noting that «Industries Qatar» independently and jointly controlled by Qatar Petrochemical Company «QAPCO», Qatar Petroleum Additives «KAVAC», «Qatar Fertilizer» Ltd. and «Qatar Steel».

Sectors affected

Al-Ashri predicted the increase in the decline in the results of Qatari companies listed in the third quarter of this year, as a result of the deteriorating situation in the Qatari macro economy after the decision of the Gulf and Arab boycott of Doha, stressing that the transport companies listed in the financial market will be one of the most affected sectors of After the net profit of the Qatar Navigation Company listed on the Qatar Exchange in the first half of this year decreased by 52%, compared with the same period of the previous year to reach 267 million Qatari riyals.

The net profits of Gulf International Services listed on the Qatar Exchange in the first half of this year fell by 90% compared to the corresponding period of the previous year to reach approximately QR 16 million, while the decline in profits of «Masraf Al Rayan» about 3 To QAR 1.02 billion compared to QAR 1.05 billion as a result of the increase in operating expenses by 6% to Rls 470 million.
Al-Ashri pointed out that Masraf Al Rayan is one of the largest Islamic banks in Qatar with a capital of QR7.5 billion. Its shares have been traded on the Qatar Exchange since 2006. He pointed out that liabilities in the mid-term budget had increased to 26.5 billion While deposits decreased by 1.9 billion riyals to 61.2 billion riyals, compared with 63 billion riyals at the end of June 2017.

The real estate sector also witnessed declines during the same period. The real estate sector listed on the Qatar Stock Exchange declined in the second quarter of this year by 19.8% year-on-year. The second quarter net profit was 799.7 million riyals ($ 223.6 million) For the same period last year of 997.6 million riyals ($ 278.9 million).

Al-Ashri added that the performance of the sector in the first half of 2017 recorded a profit of 2.3 billion riyals, a decrease of 6.2% from the value of the first six months of last year of 2.5 billion riyals, confirming that the profits of the mid-sector accounted for about 8.4% That of 9.5 billion riyals, while accounting for 11.4% of the profits of the stock market in the first half of this year, estimated at 20.1 billion riyals.

“The real estate sector comprises 4 listed shares: Mazaya Qatar Real Estate Development, Barwa Real Estate, United Development Company, and Ezdan Holding Group.” Mazaya Qatar’s second-quarter profit shrunk by 75.2% to reach 8.3 billion riyals, and the largest decline at the midpoint of 77.8%.

For the companies that topped the list of mid-term declines, Al-Ashari said that Ezdan Thani recorded the biggest decline in quarterly profits by 38.9% to 208.76 million riyals, followed by Barwa down 21.2% at 432.5 million riyals. United Development Company (UDC) posted a profit growth of 105.5% in the second quarter.

Real estate stumble

In turn, Rida Muslim, general manager of Truth Economic Consulting,Expect”The Qatari construction sector is faltering because of the Gulf rupture of Qatar with many major construction projects underway in Qatar now because of the preparations for the FIFA World Cup in 2022, Has had a direct impact on a number of sectors of the Qatari economy, led by successive losses suffered by the general index of the Qatari stock market, the result of panic investors, institutions and financial and investment portfolios, and resort to the sale of random, and liquidation of financial centers as a result of the mass exodus from the market.

The profit of the insurance sector listed on the Qatar Stock Exchange decreased by 31.5% year-on-year in the second quarter of this year, with profits of 222.63 million riyals ($ 60.66 million) compared to 325.01 million riyals ($ 88.56 million) in the second quarter of last year, In the first six months of this year, the insurance sector’s profits fell 26.9% to SR 631.2 million compared to SR 759.4 million in the first half of 2016.

The sector includes five companies: Qatar Insurance, Qatar General Insurance, Reinsurance, Gulf Takaful Group, Doha Insurance Group and Qatar Islamic Insurance Company.

The Qatari Insurance sector witnessed a quarterly and a half-year loss in the shares of «General Insurance», which became a loss in the second quarter of 3.36 million riyals, achieving the largest decline at the half level of 53.7%, while the shares «Qatar Insurance» the largest decline in profits in the second quarter of 27.4% to reach 203.4 million riyals.

The Qatari stock market witnessed severe losses following the crisis, as the Qatari stock index fell, targeting new levels of support that could reach the psychological support level at 8,000 points before the end of the year. Qatar’s dollar sovereign bonds also declined, Qatar’s sovereign debt insurance to its highest level.

Qatar’s five-year credit risk swaps rose to their highest level since early April, and Moody’s said the crisis could have a negative impact on Qatar’s credit rating if it would disrupt trade and capital flows.

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