Non-bank earnings to drive QSE growth in Q3 2025

18/04/1447 03:55 AST

The Qatar Stock Exchange (QSE) is expected to see growth in the non-bank earnings in the third quarter (Q3) of this year as LNG expansion anchor bullish sentiment.

"We expect third quarter (Q3) 2025 earnings to rise 3 percent Year on Year (YoY) and 10.7 percent Quarter on Quarter (QoQ). This follows the second quarter (Q2) of this year's 3.7 percent yearly and 1.7 percent monthly increase in aggregate QSE earnings. We see most of the growth coming from non-bank earnings, expected to rise 9.7 percent YoY and 12 percent QoQ while banks' earnings decline by 3.2 percent YoY but increase 9.2 percent YoY," QNB Financial Services (QNBFS), noted in its QSE 3Q 2025 Earnings Preview.

"We reiterate our constructive view on Qatari equities as the mainstay LNG/fundamental story anchors the Qatari economy/equities directly/indirectly with the ramping up of the North Field project - a significant portion of Qatar's expected annual LNG capacity increase is already signed-off in long-term supply contracts.

"Meanwhile, continued government efforts to grow/diversify the economy provides another platform for more companies to grow their earnings, with the latest September 2025 PMI confirming uninterrupted expansion in the non-oil economy since the beginning of 2024," it added.

According to the Bloomberg consensus, Qatar's GDP is expected to grow by 2.6 percent this year (2.4 percent in 2024), accelerating to 5.3 percent /6.2 percent in 2026/2027 as the North Field LNG project goes live.

The North Field Gas expansion, a growing tourism/sporting/MICE sector and QNV 2030 investments to make Qatar an advanced economy, will continue to be major growth drivers for company earnings. The production stage of the first phase of the North Fields LNG project is now imminent, expected to go live mid-next year.

With the successful hosting of the World Cup, perceived as one of the best editions and putting Qatar in the global spotlight, "we are of the view that pockets of the Qatari stock market should benefit from this success. Qatar has continued to grow its sports and MICE tourism brands."

The impact is visible, with Qatar registering record 5.08 million visitor arrivals in 2024 and well on track to hit the 6 million per year visitors target by 2030.

Furthermore, the construction sector has seen recent positive news flow which could eventually revive the sector's fortunes following the moderation post-2022 World Cup activity. There is a new pipeline of major infrastructure projects, spearheaded by Ashghal, Kahramaa and Simaisma.

It added, on top of Qatar's macro strengths, Qatari companies enjoy robust balance sheets backed by low leverage and decent RoEs. Specifically, Qatari banks stand out with their exceptional capital adequacy ratios and strong provision coverage. The resumption of monetary loosening should further bolster the attractiveness of the Qatari equity market as a yield play.

The Peninsula