Financial experts optimistic about QSE’s long-term performance in face of pandemic

  • 1 month ago
Financial experts optimistic about QSE’s long-term performance in face of pandemic
Qatari market’s strong profitable companies base predicted to exceed investor expectation.
Due to the COVID-19 outbreak, quarantine measures have had a significant impact on consumer and business spending, making it difficult for companies to meet critical short-term payments.
But financial experts are decidedly optimistic of Qatar Stock Exchange’s (QSE) performance in the long-term and believe that listed companies that have strong capital and sound business module will help them mitigate impacts of the Covid-19 pandemic.
The Qatar government has already pledged a QR10 billion fund support to QSE listed companies.
Sheikh Hamad bin Mohamed al-Thani, senior vice president, Investment and Treasury, Qatar Insurance Company has gone on record to state that QSE listed companies having strong capital and sound business module will be able to tide over impacts of Covid-19.
“I don’t think that any of the listed companies have survival issues unlike many of the multinational companies elsewhere where they are headed towards bankruptcy. Moreover, the country’s manufacturing sector, especially the small and medium enterprises (SMEs), should rather pick up the slag in the medical industry through a target-oriented approach to reduce the dependence on imports,” he added.
“Most of the QSE-listed companies are well capitalised and have sound business modules, which have undergone stress tests over the past few years. They have been very resilient, so I don’t think long-term investors have anything to worry at all,” he said, highlighting that the past two years had seen lower oil prices and government spending.
Talal Samhouri who manages Qatari and the Gulf mandates told local media that there is a decidedly optimistic outlook on QSE’s performance in the long-term and the Qatari market has built a strong base of very interesting and profitable companies that it will continue to be able to exceed investor expectation.
“The QSE was negatively impacted by the panic coming from this disease similar to other exchanges around the world. But once investors saw the prudent response from the government, they quickly regained confidence in it and increased in value.
The QR10bn support by Qatar similar to funding by other governments around the world has given investors the confirmation that they take all the necessary measures to support the economy, the bond and stock markets,” he added.
Apart from the QR10bn fund support announced to the QSE-listed companies, the Qatar government has already announced the Private Sector Stabilization Program (PSSP) to help the private sector mitigate impacts due to the COVID-19 pandemic.
The PSSP is a 100% guarantee scheme titled is an initiative aimed to help mitigate PSSP is directed to relieve the most critical short-term payments private sector companies will face for a maximum period of 3 months due to the pandemic. Companies that are 100% privately owned with majority shareholding (minimum 51% by Qatari partner/s in company), holding a valid Commercial Registration and have been impacted negatively by COVID-19 are eligible to apply for the program. 
Components financed by the guarantee scheme are the Wage Protection System (WPS) registry paid on a monthly basis and rental payments (factory, business outlet, warehouse and labor accommodation rent) for a period of up to 3 months paid on a monthly basis (not waived by the landlord or the government).
The total guarantee amount per company will be assessed based on the actual amounts of employee salaries and rental payments, with maximum financing allowed per applicant QID up to QAR 2.5 million per month for a period of 3 months starting from March 2020 (not exceeding QAR 7.5 million in total).
Sheikh Hamad went on to state that the one real opportunity in terms of supply chain is on the domestic manufacturing, and highlighted how Qatar went on overdrive in the food sector, especially after the blockade. 
“In order to encourage the healthcare market there should be a policy of delineating a certain proportion of domestic production, a level that could be scaled up with the progression in the sector. 
Moreover, supermarkets should reserve certain proportion of their shelf space for the local products. SMEs, partnered with government capital provided by Qatar Development Bank, should really move to pick up the slack and grow the private sector and provide these essential goods in order to reduce reliance on imports,” he added.
Overall, the financial experts have painted a robust picture for QSE’s performance in the long term and the PSSP 100% guarantee scheme is expected to boost the private sector business and help it tide over to the current corona virus pandemic.