Validation Partners for The Qatar Today Top 10
Though 2015 was just the beginning of the tough few years that Qatari companies can expect as the re-adjustment phase continues, the performance of some of the companies is encouraging. Through strategic investments and forward-thinking initiatives, many of the companies that have appeared on this year’s QT Top 10 list have shown that resilience is a trait that is second nature to Qatari corporations.
We all knew this day would come. But that it would come so soon and in such a dramatic fashion has taken everyone by surprise. The impact of low oil prices was felt across the board, particularly hitting the industrial sector the hardest. The overall profitability of many companies was affected – the net profitability of all the 42 listed companies declined by 3.65% in 2015 and the cumulative net profit amounted to QR43.94 billion.
QSE 2015: At a glance
“Four primary factors impacted the stock markets globally in 2015,” says Robin Butteriss, Head of Financial Advisory Services at Deloitte & Touche Qatar, the Validation Partners for the Qatar Today Top 10.
“A further and unexpected decline in commodity prices; continued strengthening of the US dollar; softer than expected economic growth for both developed and emerging economies; and a currency devaluation in China.
The second wave in the drop in crude oil prices began in mid-2015 adversely impacting energy and related stocks; bond yields jumped as investors demanded more return for the risks they take, while central bankers internationally kept their monetary policy loose as lower oil prices depressed inflation figures.
Overall, during 2015 the international benchmark indices such as DJIA, S&P 500 and FTSE (all shares) largely ended flat whilst the Qatar Stock Exchange index fell by around 12%, reflecting the relatively high dependency on hydrocarbons,” he says.
See below The Qatar Today Top 10:
- Gulf International Services
- Barwa Real Estate Co.
- Masraf Al Rayan
- Medicare Group
- Qatar Islamic Insurance Co.
- Qatar Islamic Bank
- Qatar National Bank
- Islamic Holding Group
- Qatar Gas Transport Co. Limited (Nakilat)
- Qatar Electricity & Water Co.
Weighted Average Criteria:
Price Growth 20%, Dividend Yield 20%, Liquidity 20%, Return on Equity 15%, Net Margin 15% and Total Revenue Growth 10%.
Audited Financial Statements for the past three years (2013-2015), Qatar Exchange. The rankings are based on published financial information (sourced from Capital IQ and Qatar Stock Exchange). Neither Qatar Today, nor its validation partner Deloitte & Touche, can be held liable for any errors or omissions appearing in the report. This does not constitute an offer or recommendation to invest in any of the listed securities.
The numerical accuracy of the calculations have been verified by Deloitte.
Of the seven sectors, only insurance companies were able to better their prospects on the bourse. Industrials had a tough time; the cumulative profit of the nine companies in this sector plummetted by 24.15% to QR9.85 billion. The year before, the sector had posted a modest growth of 4.49% which was all but wiped out in 2015. Despite this the sector contributed 22% to the overall net profitability of the listed companies last year. However, the insurance sector, which has five listed companies, reported a 2.75% increase in cumulative net profit to QR2.21 billion in 2015 compared to a huge 30.47% plunge a year ago.
The real estate segment saw its net profit slow down considerably while the consumer goods sector witnessed a 4.66% jump in cumulative net profit. The transport sector recorded an 8.59% expansion in cumulative net profit against a 17% rise in 2014.
Clearly, it is not all gloom. There is some positivity. We are seeing an absolute increased level of activity in the equity capital markets and the QSE, QFMA and the government are pushing hard for more private and family-owned companies to list on the Exchange in order to make it more robust and vibrant. This year we have the first listing by a private entity in six years, that of Qatar First Bank, which is expected to bring a lot of encouragement to other listing participants (Mesaieed Petrochemical Holding Company being the only other listing in that period). “There is a diversified list of companies currently in the queue for listing and we certainly expect to see other listings in the remainder of 2016 and 2017,” says Butteriss.