Qatari companies enjoy robust balance sheets

Doha, Qatar: Qatari companies enjoy robust balance sheets backed by low leverage and decent Return on Equity (RoE). Qatari banks stand out with their...

Doha, Qatar: Qatari companies enjoy robust balance sheets backed by low leverage and decent Return on Equity (RoE). Qatari banks stand out with their exceptional capital adequacy ratios, strong provision coverage and high profitability.

“With several QSE companies boasting strong balance sheets but beset with lower valuations, we are beginning to see new initiatives aimed at enhancing shareholder value. The new rules allowing the distribution of interim dividends by QSE-listed firms could further enhance Qatar’s appeal to local and foreign investors,” QNB Financial Services (QNBFS) said in its QSE fourth quarter (4Q) 2024 Earnings Preview.

The stock price performance of banks, ending 2024, has outperformed the QSE Index; the banking sector index increased by 3.4%, while the QE Index dipped by 2.4%.

“We are of the view that a positive outlook on 2025 asset quality could serve as a catalyst as asset quality remains a concern for investors, especially for mid-sized banks given that NPLs have spiked along with Stage 2 loans, which so far has not shown signs of improvement.”

The resumption of monetary loosening should further bolster the attractiveness of the Qatari equity market as a yield play.