Driven by infrastructure development and construction, Qatar’s robust non-hydrocarbon sector is set to grow 11.9% this year, a new report has shown.
Asset prices in Qatar are on the rise, though the overall inflation is expected to be moderate at 3.5% in 2015 amidst lack of global inflationary pressures, (Markaz) Kuwait Financial Centre said.
Qatar’s earnings in the first nine months of 2014 grew by 4% (YoY). Prolonged shutdown of Qatar Industries due to plant maintenance had led to contraction of earnings in commodities segment by 26% (9month, YoY).
In sharp contrast to other regional markets, Qatar index remained resilient with most sectors ending the year on a positive note.
“For 2015, we remain positive on banks and real estate; neutral on financial services, construction and telecom and negative on industrials,” Markaz said.
According to Markaz, the single most defining event in 2014 for the GCC market was undoubtedly a sharp plunge in oil price, completely unanticipated at the beginning of the year.
Oil price plunged by 48% on back of rising supplies from non-Opec producers (especially shale oil), and subdued demand growth expectations. UAE and Qatar indices were upgraded and they now form part of MSCI Emerging Index.
Arabtec management debacle and geopolitical developments, especially in Iraq, spooked investors in June and this was followed by a surprising positive announcement as Saudi Arabia announced that it would be opening up their markets for direct ownership by foreign investors.
IPO market in the region is on a strong revival with Saudi Arabia leading the show. The largest IPO in the Middle East & North Africa (Mena) region was witnessed this November as National Commercial Bank mopped up $6bn. The issue was well received and oversubscribed 14 times. S&P GCC Index lost 2.5% for the year, a benign outcome given the volatility.
Kuwait being the most dependent in the region on oil revenues, the recent Opec decision to retain output levels and continued growth in supply from non-Opec nations, could further exacerbate the Kuwaiti economy. The non-oil sector is expected to drive growth in Kuwait and much depends on the execution of development plans, the report said. On Saudi Arabia, Markaz said the kingdom’s non-oil GDP growth was expected to be robust. Saudi Arabia, which enjoys a favourable demographic dividend of young and a rapidly growing population has been actively pursuing various structural reforms to create job opportunities (Nitaqat) and provide housing facilities (Mortgage law).
Saudi Arabia’s corporate earnings grew by 12% (YoY) in the first nine months of 2014. Petrochemical industries and construction sector dragged whilst banking and financial services and telecom sector posted healthy growth.
Market liquidity, as measured by the ratio of value traded by market capitalization, remained buoyant in the case of Saudi Arabian market. This could be due to a host of reasons including a revival in IPO market, Markaz said.
Source: Gulf Times