* Stocks not rising on infrastructure spending hopes
* Investors waiting for actual contract awards
* Major projects may only be awarded in 2013 or 2014
* Even then, foreign firms likely to get much of the pie
* Market expected to stay flat at least through end-2012
By Nadia Saleem
DUBAI, Nov 7 (Reuters) - For a country looking forward to a massive building boom, Qatar has a remarkably sluggish stock market.
The tiny state of 1.8 million people is embarking on an infrastructure spree as it prepares to host the 2022 World Cup soccer tournament. Its planned spending includes $11 billion on a new international airport, $5.5 billion on a deepwater seaport, and $36 billion on rail projects.
But stock prices do not seem to reflect expectations of this government largesse. The main equities index is down about 2 percent so far this year, after a feeble 1 percent rise last year.
That contrasts with a 19 percent rise this year for Dubai's stock index, while Saudi Arabia is up 7 percent.
One reason is that Qatar, supported by its natural gas wealth, recovered more quickly than some other Gulf markets from the global financial crisis of 2008-2009.
By early 2011, the Qatari index had regained about half of its crisis-induced losses from its 2008 peak, leaving less room for a quick rebound to continue.
By contrast the Dubai stock index, which is heavily exposed to the emirate's volatile real estate market, is still only at about a quarter of its 2008 peak, so there is plenty of room for it to recover as property prices rebound.
But that comparison only tells part of the story. Investors are not willing to price Qatar's stocks very expensively; its index is trading at about 10.3 times analysts' estimates of corporate earnings this year, above around 8.5 times for Dubai but below Saudi Arabia's 11.7 times.
One problem, analysts say, is that investors are waiting for infrastructure projects actually to be awarded before buying stocks, rather than buying in response to the government's announcements of mere plans.
"Everybody is waiting for the award of the big-ticket new construction projects," said Yassir Mckee, head of brokerage at Doha's Al Rayan Financial Brokerage.
"But many projects are still in the preparation and study stage, thus I'm not sure if we will see any new big projects awarded before the end of the year 2012."
Qatar announced many of its infrastructure plans in 2010 and 2011, but the award of contracts has been slower than some businessmen and investors expected - perhaps reflecting caution in the government as well as bureaucratic delays.
In general, only relatively minor projects have been awarded so far. One of the biggest was a 4.5 billion riyal ($1.2 billion) contract signed in March this year for an affiliate of Qatar's United Development Co to dredge a 20 kilometre (13 mile) approach channel for the port.
Now analysts are expecting big contracts to be awarded only in 2013 or 2014.
"The tenders and awards in Qatar during 2013 and 2014 are anticipated to reach $30 billion, which will help transform not just Doha but the whole of Qatar," Mckee said.
Another issue is the extent to which Qatari companies will actually benefit from the projects. Although the government is expected to encourage them to take part in projects, local companies will often lack the size or all of the necessary expertise to participate, meaning foreign firms will inevitably take a large slice of the pie.
This will benefit the Qatari economy, where the foreign firms will spend money and hire workers, but it will not necessarily boost the bottom lines of listed Qatari companies.
"I don't think infrastructure project announcements are going to help our market much - they're just too large for Qatar banks," said the head of investments at a local bank.
"Even if you merged all the banks into one mega bank, it wouldn't have the capabilities to fund and finance the announced projects."
One of the very few stocks to rise sharply on speculation about infrastructure contract awards this year has been Industries Qatar, which hit a four-year high this week as foreign investors bought shares.
The petrochemicals and metals company posted a 23.7-percent jump in third-quarter net profit last month, beating analysts' forecasts. The stock is up 14 percent so far this year.
Among other stocks that could benefit from infrastructure building, "Qatar Navigation has room to go a bit higher due to its potential for growth. National Leasing as well, as Qatar moves towards construction projects," Mckee said.
Qatar Navigation shares are down 12 percent year-to-date, but National Leasing is up 12 percent.
"Qatar Electricity and Water is one of the most secure long-term buys, but you have to be patient and need liquidity to get in," said Mckee.
He predicted the market's main index would trade between 8,600 and 8,700 points at the end of this year, up only marginally from its current level around 8,570.