Qatar Exchange (QE) index formerly known as the Doha Securities Market 20 (DSM 20) Index measures the 20 largest and most liquid stocks in the Qatar market. The Qatar Stock Market is a stock exchange located in the capital city of Doha. QE Index is a free-float market capitalization weighted price index comprising stocks of listed companies in the Qatar Stock Exchange. The base value of the index is 1000 as on 1st January 1998.
The eligibility for stocks includes equity securities listed and available for trading on the Qatar Exchange for more than six months. QE index constituents must have recorded annual share velocity greater than 5% and have individual limit holdings of no less than 1% for inclusion.
The index is reconstituted semi-annually on the first trading day of April and October based on a twelve month observation ending last trading day respectively in February and August.
All listed companies are ranked by giving free float market capitalization a 50% weight (or consideration) and 50% weight to the average daily traded value. Companies with velocity less than 5% are excluded from the review in which company’s single shareholder can only own less than 1% of the total outstanding shares.
The 20 constituents of the QE index are determined for the 6 months that follow. A 15% cap is applied to an individual constituent’s weight in the index, with the excess weight distributed proportionately among the remaining index constituents where the adjustment takes place only at rebalance dates.
The index is calculated using the Weighted Average Market Capitalization methodology where the price multiplied by the free float gives the market capitalization of its constituents. The weightage of each company is arrived at by dividing the market capitalization of each company with the total market capitalization of all the companies. The larger the market weightage of the company the larger is the impact due to 1% change in its price on the index.
The QE Index has given a return of 38.33% on a year on year basis and 31.24% from year to date. Qatar National Bank has the highest weightage of 13.62% in the index followed by Industries Qatar company with a weightage of 13.47%, Rayan with 12.53%, Ooredoo with 6.62% and Qatar Islamic Bank at 5.8% while others have less than 5.5% weightage each in the index.