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The Qatar Stock Exchange (QSE) is poised to launch new investment incentives after a series of steps taken this year aimed at developing its systems, making it a platform for attracting local and international investments.
These steps have contributed to the increase in demand of local and international entities to invest in the world’s largest emerging market listed in the global indices in the region, and the second largest exchange in the Middle East in terms of capital.
The latest steps that have been taken in this regard is the launch by the QSE of two investment funds for the first time in its history, at a time when it plans to launch a market for trading shares of small and medium enterprises (SMEs) during the second half of this year.
On March 4, the QSE announced details of exchange traded funds (ETFs), a group of securities in an investment fund. They are Qatar’s first listed ETFs on the QSE and the largest in the Gulf. The ETF designed to track the Qatar Exchange Index, which monitors 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 the QSE.
Al Rayan Qatar ETF (QATR) 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 $120mn. CEO of Qatar Stock Exchange Rashid Ali al-Mansoori said in a statement to Qatar News Agency (QNA) that the QSE is currently seeking to launch more ETFs as it is one of the most popular products among investors, both domestically and abroad.
The State of Qatar, he said, is one of the most qualified to achieve high growth rates in the region’s ETF sector, considering that the nature of these funds suits the thinking of investors in the region.
Qatar has a strong and diversified investment climate supported by a package of financial and regulatory laws that make it in the forefront of these markets, he said, adding 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, Al Rayan Qatar ETF (QATR), aims to track the investment results of the QSE’s Al Rayan Islamic Price Index.
The QSE, in its quest to establish a market for emerging SMEs, is working to create an incubator to achieve sustainability and growth of family businesses, the QSE CEO said, stressing the readiness of the stock exchange to provide all the facilities available to family businesses. The importance of listing private and family companies on the stock exchange, he added, stems from the economic influence of these companies in a 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. The new corporate listings is another element that makes the stock exchange more attractive for investment.
The QSE has already supported the plans of companies that want to be listed; two companies are expected to be listed on the QSE before the end of this year.
Earlier this year, Baladna, a dairy company, announced that it would be offering its shares for public this year as its activities expand. Qatar Petroleum also announced last May that it will be offering 49% of its shares in Qatalum for public offering, following the directives of His Highness the Amir Sheikh Tamim bin Hamad al-Thani, to offer Qatari nationals shares in state-sponsored companies that enjoy safe investment environment and lucrative returns.
It is expected that the necessary procedures will be taken and approvals for the listing will be granted during the last quarter of this year. The QE CEO says achievements in the previous IPOs show the readiness of the QSE and its continued support to companies that are planning IPOs. He added that the market provides advanced infrastructure and innovative services that enable investors to invest their savings in a legal environment that works according to the best international practices.
The stock exchange, in partnership with competent authorities, formed a team aimed at activating the IPO market through holding consultations with market participants and making recommendations and studies, he added.
On attracting domestic and foreign capital to the stock market, al-Mansoori said that the QSE’s strategy for attracting domestic and foreign capital is based on the launch of new initiatives and diversification of investment instruments, most recently the launch of the ETFs.
The QSE is working in general to develop services and laws, start a single window mechanism for listing, develop the licensing mechanism for intermediaries in co-operation with the Qatar Financial Markets Authority, and also trying to develop the services so that through a single window an investor can get the required service within seconds or delivered through modern technological media, as well as seeking to provide all services online, al-Mansoori said.
He stressed that the QSE strives to provide the modern tools and knowledge necessary to develop the investor relations strategies of each company to improve and enable its communication with the investment community very easily and in a timely manner, in addition to holding conferences to connect with listed companies and support them to achieve further progress in terms of investor relations. These meetings aim to study new practices in the global financial markets and to identify what investors, portfolios, and individuals are looking for, he added.
The QSE CEO also stressed that despite the current circumstances, the status of the QSE has not changed but has strengthened and become the focus of many foreign investing entities, which include the US, European and Asian investment groups and local investors.
A large number of foreign portfolios were registered to open trading accounts on the QSE to start trading on Qatari stocks, he noted. Al-Mansoori pointed out that everyone knows that Qatar has a dynamic stock market, the largest emerging market in the region, and it is able to withstand any crisis as it overcame the 2006 crisis, the mortgage crisis in 2008, the low oil prices, the decline of Asian currencies and other such challenges.
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