Qatar Electricity and Water Company (QEWC) is closing in on an acquisition in Jordan, and investors are hoping the company will achieve its objective.
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After QEWC said it expected to close the deal in a matter of days, shares rose the most in a month yesterday.
QEWC, the third-largest publicly traded utility in the Middle East by revenue, is seeking to buy a stake in a Jordanian power plant, the Jordan Times reported yesterday, citing an interview with Fahad Al Mohannadi, the company's general manager. He declined to disclose the name of the target, but investors were still encouraged.
The company gained 1.05 per cent to 144.4 Qatari rials yesterday, extending a rally during which it has risen 22.4 per cent since lows in February.
Last month, analysts at Nomura raised their price target on the company to 190 Qatari rials from 165 rials, citing the defensive nature of the stock.
The Middle East power market is perceived as ripe for investment because capacity in most countries is constrained while demand is strong, Scott Darling, a Nomura analyst, wrote in a note to investors.
Mr Darling also has a "buy" rating on the stock.
QEWC is also thought to be potentially among the main beneficiaries of Qatar's possible upgrade to emerging-market status by the index compiler MSCI. Despite a decision being delayed until December, there is still optimism that the door has not closed on Qatar's chances.
In previous efforts to expand outside Qatar, where it already holds stakes in power plants, QEWC has looked at opportunities in India, South Korea and Vietnam.
But closer to home, it has not had as much luck.
In March, QEWC was forced to withdraw from the bidding on a power plant project in Saudi Arabia after its partner AES pulled out.
In May, it also called off plans to build two power plants in Syria worth about US$900 million.
