According to the World Economic Forum's 2015-2016 Global Competitiveness Report, the institutions of Qatar were ranked 4th highest in the world, while the development of the Qatari financial market was ranked 13th among the 140 countries surveyed in the report. Key among the institutional strength of Qatar's developed financial market is the soundness of its banks, for which the country was ranked 10th in the world. The falling price of oil has had a direct and jarring impact on many oil-dependent economies, and Qatar is no exception. Most of the short-term financial risk for Qatar's economy lies in the volatility of oil prices compared to the price movements projected in the Qatar National Vision 2030 (QNV2030) amidst the massive initiatives of investing public funds into the nationwide portfolio of megaprojects planned for the FIFA 2022 World Cup. While Qatar's breakeven price of oil is below current price forecasting for 2016-2017, the projected external-balances are also below these forecasts. What epitomizes the leadership of Qatar is its aplomb for the long-term consideration of asset management. While leaders from the private sector and government officials of many oil-dependent countries, particularly those in the GCC, are forced to expedite the development of markets for the non-hydrocarbon sector—risking in the process the emergent properties of inefficient market structures that again fail to optimally position the economies for long-term prosperity—Qatar has the advantage of substantial fiscal buffers accumulated from years of wise utilization of hydrocarbon revenues. At 14.5% of GDP, the government budget balance was ranked 2nd in the world by the Global Competitiveness Report, while the 59.4% GDP gross national savings put the country in the top position worldwide.
Liquidity levels remained strong in Qatar's banking sector during 2015. Money supply to the banking sector (M3) totaled $1.91 million in 2015, with M2, M3, and currency issued totaling $1.70 million, $417,641, and $48,471 respectively. M3 money supply in the banking sector in 1Q2015 totaled $477,493, then grew by 1.36% to $484,084 during 2Q2015. M3 supply reached just $472,545 in 3Q2015, a 2.44% QoQ decline, and finished the year with $475,289 in 4Q2015, marking a 0.58% QoQ growth. M2 money supply in the banking sector in 1Q2015 totaled $419,881, then grew by 1.79% to $427,529 during 2Q2015. M2 supply increased just nominally to $427,538 in 3Q2015, and finished the year with a 4Q2015 0.46% QoQ decline to $425,585. M1 money supply in the banking sector in 1Q2015 totaled $104,743, then fell by 0.41% to $104,312 during 2Q2015. M1 supply reached just $104,202 in 3Q2015, a 0.11% QoQ decline, and finished the year with $104,385 in 4Q2015, marking a 0.18% QoQ growth. Currency issued in the banking sector in 1Q2015 totaled $11,614, then grew by 6.55% to $12,427 during 2Q2015. Currency issuance reached $12,144 in 3Q2015, a 2.33% QoQ decline, and finished the year with $12,286 in 4Q2015, marking a 1.16% QoQ growth.
The availability and affordability of financial services in Qatar were ranked 13th and 6th, respectively, by the Global Competitiveness Report, while the efficiency of the financial sector and the ease of access to loans in the country were both ranked as the best in the world. Qatar's commercial banking sector recorded another strong performance in 2015, with total commercial bank deposits reaching $2.06 million, and total commercial bank credit facilities totaling $2.10 million during the year. Public sector deposits in 1Q2015 totaled $183,853, then grew by 0.29% to $184,381 during 2Q2015. Public sector deposits dropped by 7.10% during 3Q2015 to just $172,165 before reversing the trend in 4Q2015 with a 1.90% QoQ growth to $175,503 during the final quarter of the year. The private sector played a larger role than the public sector in 2015 as a source of deposits for the consolidated banking sector in Qatar. Private sector deposits in 1Q2015 totaled $267,249, then grew by 4.24% to $279,070 during 2Q2015. Private sector deposits reached $285,379 in 3Q2015, just a 2.21% QoQ growth, and finished the year with $288,290 deposited in 4Q2015, marking a 1.01% QoQ growth. Non-resident deposits in 1Q2015 totaled $46,168, then grew by 18.54% to $56,678 during 2Q2015. Non-resident deposits grew 5.99% to $60,289 in 3Q2015, and by just 2.65% to $61,932 in 4Q2015.
Commercial bank credit extended to the public sector in 1Q2015 totaled $183,348, then fell by 1.34% to just $180,921 during 2Q2015. Commercial bank credit extended to the public sector grew by 2.22% during 3Q2015 to $185,026, and the $192,972 credit extended to the public sector in 4Q2015 marked a 4.12% QoQ growth during the final quarter of the year. The private sector also played a larger role than the public sector in 2015 as a customer for the credit facilities extended by the consolidated banking sector in Qatar. Credit to the private sector in 1Q2015 totaled $297,831, then grew by 5.72% to $315,899 during 2Q2015. Private sector credit reached $334,686 in 3Q2015, a 5.61% QoQ growth, and finished the year with $344,123 deposited in 4Q2015, marking a 2.74% QoQ growth. Commercial credit facilities extended to non-residents in 1Q2015 totaled $58,798, then grew by 3.24% to $60,767 during 2Q2015. Non-resident deposits grew by just 1.93% to $61,965 in 3Q2015, while the $70,202 of credit extended in 4Q2015 marked a strong 11.73% QoQ increase.
Banks not only provide lending and deposit services for the Qatari economy, but banking is also the largest sector by market capitalization of all sectors whose publicly listed companies' shares are traded on the Qatar Stock Exchange (QSE). According to the 2015 QSE Investor Guide, there were 43 companies with listed shares on the QSE with a total market capitalization of $185.87 billion. A total of 4,439,856,747 shares traded through 2,058,604 transactions at a value of $54.73 billion, with an average of 2,157 $12.33 shares exchanged per transaction. Of the 43 companies listed on the QSE, 12 were from the banks and financial services sector. At $75.14 billion, the market cap of the banking and financial services sector represents 40.42% of the consolidated QSE market cap. Both the average $32,214 per trade and the average trading value of $17.51 per share were above the QSE average by 21.16% and 42.00% respectively. A total of 1,092,754,400 shares were traded at a value of $19.13 billion, 24.61% and 34.95% above consolidated QSE averages. While the average 1,840 shares traded per transaction fall 17.20% below the market average, the 593,818 trades executed set the banking and financial services sector 28.85% above the total QSE average.
At $66,280,342,589, five of the top 15 firms by market capitalization are in the banking and financial services sector and hold a 35.66% share of the entire QSE market cap. Qatar National Bank, Doha Bank, Commercial Bank, Qatar Islamic Bank, and Masraf Al Rayan account for 88.21% of the extremely concentrated financial services sector. With a market cap of $40.91 billion, Qatar National Bank, the country's central bank, accounts for 54.45% of the banking sector market cap and 22.01% of the consolidated QSE market cap. Qatar National Bank's shares traded at an average of $52,921 per transaction at an average value of $53.99 per share, 64.28% and 208.41% above the financial sector average, respectively, and 99.04% and 337.95% above the consolidated QSE average
At $9.10 billion, Masraf Al Rayan, the second largest bank by market cap and sixth largest company listed on the QSE, represents 4.90% of the total QSE market cap and 12.12% of the banks and financial services market cap. Qatar Islamic Bank, the country's leading sharia-compliant financial institution, has a market cap of $6.63 billion, representing 3.57% of the consolidated QSE market cap and 8.83% of the financial sector's market cap. Commercial Bank of Qatar has a market cap of $5.59 billion, which accounts for 5.38% of the financial sector market cap and 2.18% of the total QSE market cap. At $4,04 billion, Doha Bank's market cap represents 5.38% of the financial sector market cap and 2.18% of the overall QSE market cap
Qatar International Islamic Bank, Ahlibank, and Al Khalij Commercial Bank have market caps of $3.40 billion, $2.48 billion, and $2.18 billion respectively, which represent 4.52%, 3.30%, and 2.90% of the banks and financial services sector total market cap. Dlala Brokerage and Investment Holding Company holds 0.35% of the financial services market cap at $260.95 million, while Islamic Holding Group's $136.77 million accounts for 0.182% of the financial services sector market cap. Rounding out the 12 listed companies on the QSE from the banks and financial services sector are National Leasing Holding, with a $271.78 million market cap that accounts for 0.36% of the sector's market cap, and Qatar Oman Investment Company, whose $133.23 million market cap accounts for 0.177% of the financial sector total.
From https://www.thebusinessyear.com.