50 foreign portfolios open to trade in QSE companies

01/08/2017 06:02 AST

The Qatar Stock Exchange (QSE) has witnessed the opening of more than 50 foreign investment portfolios, indicating the growing appetite of international fund houses to invest in the fastest growing economy amidst the continued economic blockade.

The new accounts have been opened in just one week to trade in the shares of the companies listed on the QSE, the bourse’s chief executive Rashid bin Ali al-Mansoori said. His comments come at a time when two global investors from the UK and Hong Kong have initiated talks with the bourse on establishing exchange traded fund and commodity fund respectively.

“This large turnout by foreign portfolios and international investment instructions reflects the strong fundamentals of Qatar’s economy and the investment attractiveness of the QSE and its listed companies,” he said.

The QSE is believed to have received more than 140 investor applications from new foreign investment portfolios wishing to enter the bourse.

Al-Mansoori highlighted that despite the blockade imposed since two months ago on Qatar by some neighbouring countries, the QSE has proven its robustness with the average daily trading turnover increasing so far by about 20% to reach about QR300mn per day.

In the initial days of diplomatic and economic blockade, “certain and specific” funds from the siege countries excessively dumped shares to depress the market but the bourse “absorbed” such shocks, thanks to local investors and international institutions.

The bourse witnessed a more than 7% fall on the first day of diplomatic row but later it pared the losses to intermittently gain and then largely swayed as it would be during the normal market conditions with investors becoming aware of the intrinsic strength of the Qatari economy.

The International Monetary Fund estimates Qatar’s real gross domestic product to grow 3.43% this year compared to 3.4% in 2016, while Saudi Arabia would a 1.92% gain (1.21%), the UAE 2.5% (2.3%), Kuwait 2.6% (2.4%), Bahrain 2% (1.74%) and Oman 2.2% (1.83%). The US-based Institute of International Finance had said Qatar’s fiscal balances may not be majorly impacted by the diplomatic stir and trade disruptions since 80% of the government revenues come from hydrocarbons. Qatar has “ample” financial resources and fiscal buffers, a fact that has been corroborated by HE the Finance Minister Ali Sherif al-Emadi, who said the reserves and foreign investments amount to 250% of its GDP.

Analysts view that the domestic economy as well as the bourse has promising potential considering that Qatar, which is in the midst of a more than $200bn infrastructure development in the run up to 2022 FIFA World Cup, has offered immense potential for the corporate sector across the world with its multi-billion dollar projects.

The portfolios of the siege countries account for less than 1% of the QSE’s capitalisation and therefore their exit would not have “significant” impact, al-Mansoori had said earlier, highlighting that the American and British funds have increasingly found their way into the QSE.

Confident that Qatar could weather the blockade, he had said the QSE is well prepared and enjoying advanced infrastructure, fair and orderly market, healthy investor relations and transparency practices, and robust regulatory framework combined with a clear long-term strategy (five-year business plan).

Gulf Times