Posted on July 17, 2015

Driven by strong fundamentals, Qatari market will continue to perform well, said The Peninsula. The government will continue with its infrastructure spending as majority of these projects were planned before winning the World Cup bid in 2010. Infrastructure spending is expected to support economic growth of over six percent per annum until 2017, a Qatar-focused fund noted.

The London Stock Exchange (LSE)-listed Qatar Investment Fund (QIF) said Qatar remains its favoured market in the GCC region due to the stable political environment, massive infrastructure spending plans, strong growth in the non-hydrocarbon sector and sizeable hydrocarbon reserves, coupled with attractive valuations and a healthy dividend yield. At the end of the second quarter (Q2, 2015) QIF had 20 holdings. Of these 18 are in Qatar and 2 in UAE, QIF said in its "Q2, 2015 Investment Report."

QIF remains overweight in the Qatari banking sector, with a weighting of 51.4 percent of net asset value ( NAV) at the end of Q2, 2015 vs.50.8 percent in Q1, 2015. Qatar National Bank (QNB) is QIF's largest holding with 16.9 percent of NAV. 

Industrials remain the second largest exposure at 25.7 percent vs 15.2 percent in Q1, 2015. During the quarter, QIF's Investment Adviser increased exposure to Industries Qatar (14.4 percent of NAV) seeing an upward trend in petrochemical prices and valuations began looking attractive. Exposure to Gulf International Services remained stable at 6.4 percent, while exposure in Qatar Electricity and water reduced from 5.3 percent in Q1 2015 to 4.9 percent at the end of Q2, 2015.

QIF's weighting in the real estate sector was unchanged (8.8 percent of NAV). Exposure to the telecom sector reduced from 3.7 percent in Q1, 2015 to 3.4 percent at the end of Q2, 2015. Exposure to telecom sector reduced from 3.7 percent in Q1, 2015 to 3.4 percent at the end of Q2, 2015. The weighting in transportation increased to 5.1 percent in Q2, 2015 from 4.7 percent in the previous quarter.

QIF 's NAV increased 2.8 percent during Q2, 2015, while Qatar Exchange (QE) benchmark index gained 4.2 percent during the same period. The performance of the QE was mainly driven by gains in Ezdan Holding, up15.3 percent and Qatar Insurance Company , up 21.5 percent, as these stocks were added to the MSCI emerging market index. The underperformance by QIF relative to the QE Index rose because Ezdan Holding is not held by QIF.

The QIF's top 10 Qatari holdings include QNB, Industries Qatar, Masraf Al Rayan, The Commercial Bank, Qatar Islamic Bank, Gulf International Services, Doha Bank, Qatar Electricity and Water, Barwa Real Estate and Qatar Navigation.

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