partners. When comparing between QR and
US Dollar (either dollar index or dollar
REER), the difference in the volume of trade
exchange weights between the QR riyal's
partners and the dollar's partners should be
taken into consideration, as it becomes clear
that the US dollar index is influenced by
57% of the European market group
variables, while the QR is only be affected
by about 18% of the European market
variables because the Asian market is the
main partner of Qatar by more than 63%.
Thus, if the QR index rises, it will increase
the purchasing power for imported goods,
but at the same time will discourage the
export situation of Qatari products. On the
other hand, a decline in the QR index would
Appendix: Economic and Financial Terms
125
of course increase the competitiveness of
Qatari products. In terms of the impact of
the contraction of the Qatar CPI during Oct
2019- July 2020 compared to its trade
partners, it is clear that this results in the
increase of Qatar's REER and, thus, the QR
purchasing power became stronger.
Qatar Stock Exchange Concepts
What is the methodology of measuring the
performance of the Qatar Stock Exchange?
The QSE measures the performance of its
portfolio using three benchmark indices and
eight sub-indices. There are three primary
indices normally used, as follows:
The General Index: This contains the top 20
largest and most liquid stocks, assigning a
maximum weight for each share of 15%;
hence the General Index is used to measure
the performance of the price of shares
comprising the index.
The Index of Total Return (yield) of stocks is
similar to the General Index regarding its
composition, but it measures the income from
the earnings of shares (i.e., the dividends).
The Third index is the All-Shares Index,
which as its name suggests, is comprised of
all the shares listed on the stock exchange
(about 44 companies) and which does not
have an absolute ceiling for the weight of the
shares. One caveat for this index is that its
shares should have a movement of at least
1%, which is the ratio of the number of shares
transferred from one person to another
during the year. The All-Shares Index
measures both prices and the movement of
income from dividends. Note that the All-
Shares Index is the average of the sub-
indices of the leading economic sectors
(banking and finance, industry, insurance,
real estate, consumption, communication,
and transportation). It provides a mechanism
for potential investors to analyze the
performance of each economic sector
concerning their prices and income from
dividends. It also enables investors to
compare the QSE with the performance of
the S & P index.
What is the methodology of measuring the
performance of the Real Estate Index?
During the past two decades, the real estate
market in Qatar has witnessed sharp
fluctuations because of imbalances between
the forces of supply and demand, as was the
case in the rest of the real estate markets at
both global and GCC levels. In order to
monitor the trajectory of the real estate
market in terms of market value of real estate
and to maintain the liquidity of the banking
sector, given that real estate activities
constitute about 38% of the local banks'
credit, in 2011 the Qatar Central Bank (the
entity supervising the financing process) in
cooperation with the Ministry of Justice
(responsible
for
the
real
estate
documentation process), prepared an index
of prices of real estate in Qatari cities. The
Qatari real estate index is based on data of
real estate sales deals (including land,
residential villas, and residential real estate)
that are collected by the Ministry of Justice
with the exception of deals that are unusual
or performed independently, such as the
transfer of ownership within a family. The
period April 2009 - March 2010 was selected
as the baseline year for computing price
changes. For more details on the index
calculation methodology, kindly refer to the
third financial stability report of the Qatar
Central Bank (pages 85-86).
There are also two additional indices that are
directly related to real estate activities. The
first one relates to rents, while the second
one relates to credit facilities for real estate,
where the average change in the rental price
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