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Ammon News - Qatar is gearing up for a FIFA World Cup equity market boom as the country’s stock exchange is all set to benefit from the upcoming colossal event.

With more than $4bn of foreign inflows in the first 10 months of this year alone, equity market experts say that Qatar’s stock market, like most previous World Cup host markets, has outperformed peers in the run-up to the mega contest and is expected to continue along similar lines in the year after the tournament.

Historically, the average MSCI country stock market index of host nations of the previous seven World Cups, excluding outlier Brazil, grew by 21.8 percent in the year leading up to the World Cup and by 13.4 percent in the year after, compared with the MSCI World Index average growth of 4.3 percent and 9.5 percent respectively.

Brazil’s MSCI Index was an outlier and declined by 34 percent in the year after the final match in 2014. That drop was on account of domestic economic conditions, a political crisis and high inflation prevalent at the time, analysts say.

However, 2022 is proving to be an extraordinary year as stock markets bear the brunt of interest rate hikes by central banks attempting to fight inflation and turning off the supply of easy money that was started during the pandemic. Qatar’s stock market has not been immune to either.

The QSE Index, which measures the 20 largest and most liquid stocks on the Qatar Stock Exchange (QSE), appreciated as much as 24.7 percent from the start of 2022 to April 11, 2022, but then declined to almost flattish territory in late June and was again up by 12.1 percent year to date on September 5, 2022.

While that may not seem like a lot, it still puts the QSE Index as a relative outperformer among most major regional and global markets in the first eight months of this year, as per the latest data available.

“Given that the country is preparing for the World Cup for more than a decade, to focus on a short period of stock performance won’t be a fair reflection,” said Akber Khan, senior director of asset management at Doha-based Al Rayan Investment.

“If we look at the performance of Qatar’s stock market in the last five years, when preparations related to the World Cup accelerated in terms of the pace of work, Qatar’s stock market is up more than 50 percent,” Khan added.

During that period, the broad index of emerging market equity is down more than 20 percent, while the global equity indices are up about 15 to 18 percent, he pointed out.