Qatar’s stock market has returned to normalcy, shrugging off impact of blockade imposed on Qatar by some of its neighbouring countries. After witnessing a sharp volatility for few days after June 5, the Qatar Stock Exchange (QSE) index is now trading in a stable range of 8,700 to 9,300 points.
Even the numbers of transactions in the stock market, which saw a sudden and abnormal spike on the day of announcement of blockade, are in the normal range. The market witnessed around 7,000 transactions on June 5 (when the blockade was announced) and around 8,800 transactions on the next day, which was unusually high for Qatar’s market. Now the transactions are happening the range of 3,000 to 4,000 per day.
The stability in trading reflects that the there is no impact of Qatar’s boycott on the stock market.
“There was panic selling in the stock market on the day of announcement of blockade, but after a few days the market returned to its senses. The movement in QSE index in the past one week shows that the market is stable now. If you look at the last nine trading days, the index has moved in the range of 8,700 to 9,300 points, which reflects the stability in the market,” Ahmad Akl, Doha based financial analyst told The Peninsula.
“Number of transactions increase during volatility because day traders try to make profits out of fluctuations in the shares,” he added.
Also the drop in the prices in the first week of this month has proved as a blessing in disguise for long term investors. Due to the drop, the blue-chip stocks are now available at lower prices. Experts believe that the blue-chip stocks are bound to go up once there is more clarity about the ongoing stand-off. “The fall in the shares is temporary is because of political reasons and not due to any problem with the performance of companies. Once the situation becomes normal, these share will also rise,” said Akl.
Experts suggest that long term investors should use this decline in prices to buy quality stocks for long term.