Qatar National Bank’s Turkey Unit More Valuable Than Its Parent

September 28, 2023

A more than 500% rally in shares of Qatar National Bank’s Turkish unit this year has given the stock a higher value than its parent.

QNB Finansbank AS has seen its market capitalization jump to 1.1 trillion liras ($41 billion) — taking it above QNB, the biggest Gulf bank by assets, which has a market value of about $40 billion.

Unprecedented levels of activity by Turkish local retail investors, especially since the pandemic, has helped drive unlikely rallies across the nation’s equity market. Stocks with slimmer free floats have been particularly affected, as they’re more susceptible to wild swings.

Only about 4 million of the more than 3.3 billion QNB Finansbank shares outstanding are publicly traded, with 99.9% of the stock closely held by QNB, according to data compiled by Bloomberg.

A spokesperson for QNB Finansbank declined to comment. Qatar National Bank did not immediately respond to a Bloomberg request for comment.

The minimal free float “is making such names extremely susceptible to sharp movements and unjustifiable valuations,” said Can Oksun, a senior trader at Global Securities in Istanbul.

Given that the size of QNB Finansbank’s free float does not meet the minimum requirement of Turkey’s stock exchange, it was demoted to a different platform in 2021 following a warning.

Turkey’s equity investors soared to 7.8 million in September, up from 2.7 million in the same period last year, according to Central Securities Depository of Turkey.

Source from: Bloomberg