30/12/2012 08:37 AST
Having laid solid foundations, NYSE Euronext reduced its exposure to the Qatar Exchange, which somehow, lost yet another chance in 2012 to make it to the “emerging” market status on the global index compiler MSCI Index despite making efforts to streamline the process and procedures.
Although the US “fiscal cliff,” the lingering eurozone crisis, and to some extent Arab Spring, did play spoilsport, the New Year appears to be promising for both stock and debt markets.
In 2013, the stock market is expected to witness the advent of margin trading and lending and borrowing of securities, while in the debt market, now at a very nascent stage, Qatar is all set to establish a credit rating agency for domestic non-government entities wishing to tap debt market.
It seemed to be a slip between the cup and lip for the fastest growing Qatar when MSCI extended the deadline further in June to review Doha bourse’s position from the present “frontier” status.
The issue of foreign ownership limits appears to have gone against an expected upgrade, which would have entailed an additional $1.5bn-$4bn foreign funds inflow, although the QE, which witnessed a change of guard, has steadfastly been implementing multi-pronged reforms aimed at elevating its status to a natural choice for investments in the Gulf region.
A Global Investment House study found that more than 85% of the listed companies on the QE do not have foreign ownership that is commensurate with the allowed limits and only 29% have the maximum limit of 25%.
The QE has been in the watch list for the last five years and the exchange has done all that is required in terms of infrastructure with the latest being the introduction of delivery-versus-payment system (DvP), according to Mohsin Mujtaba, director (products and market development) at the QE.
The bourse, whose new DvP system came into force as the first step towards enhancing post trade infrastructure, is working out the modalities to allow securities lending and borrowing, margin trading and covered short selling as part of its liquidity boosting measures. They should go well down with international investors, who are now eyeing the Qatari bourse in a big way.
The Qatar Financial Market Authority (QFMA), which will be one of the axes of the proposed single financial regulatory regime, issued four new regulations on financial services, covering liquidity providers, lending and borrowing of securities, rules of guaranteed entry to market’s standards and rules for listing units of investment funds.
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