QSE to launch investment incentives to boost market

DOHA: Qatar Stock Exchange (QSE) is poised to launch new investment incentives after a series of steps that have been taken during the current year to confirm its intention to develop its systems, making it a platform for attracting local and international investments.

These steps have contributed to the increasing demand of local and international investment portfolios to invest in the world’s largest emerging market listed in the global indices in the region, and the second largest exchange market in the Middle East in terms of its capital.

The latest steps that have been taken in this regard is Qatar Exchange’s launch of two investment funds for the first time in its history, at a time it plans to launch a market for trading shares of small and medium enterprises during the second half of this year.

Rashid Ali Al Mansoori, CEO of QSE, said in a statement to Qatar News Agency (QNA) that QSE is currently seeking to launch more ETFs as it is one of the most popular products among investors both domestically and abroad.

Qatar, he said, is one of the most qualified regions to achieve high growth rates in the ETF sector, considering that the nature of these funds suits the thinking of investors in the region. The QSE, in its quest to establish a market for emerging small and medium-sized companies, is working to create an incubator to achieve sustainability and growth of family businesses, the QE CEO said, stressing the readiness of the stock exchange to provide all the capabilities available to family businesses.

QSE is working in general to develop services and laws, activate the single window mechanism for listing, develop the licensing mechanism for intermediaries in cooperation with the Qatar Financial Markets Authority, and also try to develop the services so that there is one venue that the investor reaches and gets his service in seconds or delivered through modern technological media, as well as seeking to provide all services online, Al Mansoori revealed.

On March 4, Qatar Exchange announced details of exchange traded funds (ETFs), a group of securities in an investment fund. It is Qatar’s first listed exchange traded funds (ETF) on the Qatar Stock Exchange (QSE) and the largest in the Gulf.

The ETF designed to track the Qatar Exchange index which screens for the top 20 listed companies in Qatar by market cap and liquidity.

At the end of the same month, the QSE witnessed the listing of Al Rayan Qatar ETF (QATR). The Fund tracks the QSE Al Rayan Islamic Index (Price), which consists of Shariah-compliant companies listed on QSE.

Al Rayan Qatar ETF is one of the largest Islamic funds traded in the Middle East and emerging countries and the second largest Islamic fund in the world. It is also the largest Islamic investment fund listed in one country, with an initial asset of $120m.

Al Mansoori said Qatar has a strong and diversified investment climate supported by a package of financial and regulatory laws that make in the forefront of these markets. he added that the Qatari market is qualified to achieve significant growth rates in this sector, especially after the entry of international investors.

Al Mansoori pointed out that the launch of the first ETF in the Qatar Exchange was aimed at following up the investment results of the prices of Qatar Exchange index by investing in the basic components based on individual weights in the index, which benefit the investor.

He added that the other index listed on QSE, Al Rayan Qatar ETF (QATR), aims to track the investment results of QSE Al Rayan Islamic price index.

In order to boost the attractiveness of investment in the stock market, the QE urged listed companies to raise foreign ownership limits in their shares to 49 percent instead of 25 percent, to which many of the largest companies responded, led by the subsidiaries of Qatar Petroleum which announced at the end of March that it approved raising the non-Qatari ownership limit in the energy sector companies and in its subsidiaries listed on the Qatar stock Exchange to 49 percent, and raising the shareholder ownership limits in these companies to no more than 2 percent.

Qatar Electricity and Water Company, Qatar Fuel Company (WOQOD), Gulf International Services Company and Mesaieed Petrochemical Holding Company, all listed companies, have taken the necessary measures in accordance with the applicable regulations and procedures to approve the increase in the non-Qatari ownership limit to 49 percent. The latest of which was WOQOD’s approval at its extraordinary general assembly meeting to increase foreign ownership limit to 49 percent.

Al Mansouri said that recent decisions by the listed companies to raise foreign ownership limits have had a positive impact on the performance of the market, especially with the expectation of attracting new foreign liquidity in view of the important role of these shares in term of financial performance, growth and profitability as well as targeting the foreign portfolios of those shares because of their advantages.

He pointed out that these decisions represented a positive step as they enhanced the presence of foreign capital in the Qatari stock exchange and increased the inflows of foreign investment in the stock exchange. They also raised the level of liquidity and revived the level of trading, he said.

They also showed that raising foreign ownership limit to 49 percent comes within the context of promoting and developing the Qatari stock market and broadening the base of economic openness, which will positively affect listed companies, the market and investors, he said, pointing out that he increase in ownership has been a long-standing demand for investors and foreign portfolios, and its implementation has enhanced the presence of foreign investment.

Commenting on the outcomes of this step, he said as energy companies are considered to be well-positioned, the decision to raise the non-Qatari ownership limit in the energy firms listed on Qatar Exchange has been timely in terms of economic growth in Qatar as well as in terms of expanded economic activities in the fields of agriculture, industry and others.

He stressed that this step came in light of the growing strength and soundness of the national economy in which the Qatari energy industry plays a key role, pointing out that these decisions support the openness of the Qatari economy and make it more competitive and fastest growing in the region.

Qatar Exchange’s efforts went beyond trying to introduce new investment products and developing the existing ones to support and develop a number of family businesses to become public shareholding companies to ensure the continuity of these companies and to open new horizons for them.

For this purpose, the Qatar Exchange held several seminars to raise awareness about the importance of transforming family businesses into joint stock companies in the interest of these companies and the national economy, at the same time the QE is also seeking to launch a trading platform for small and medium enterprises, which will provide a good opportunity to list those types of companies and work to inject new capital into the stock exchange by trading their shares.

The importance of listing private and family companies in the stock exchange, he added, stems from the economic influence of these companies in large number of vital sectors in Qatar, pointing that the transformation of family companies into public shareholding companies boost the effectiveness of the economy in general, which reflect positively on the local economy through the establishment of standards and regulations for family businesses that represent a real addition to the national economy.