Qatar Exchange is Well Set to Attract Emerging Market Inflows

Qatar Exchange

The 9th World Exchange Congress 2014 was held at St. Regis, Doha, Qatar from 24th to 26th March 2014.Dr. R. Seetharaman, CEO of Doha Bank participated in the conference on 25th March 2014.The event was attended by economists, Bankers,Regulatory Officials, Government officials and Heads of Brokerage from major countries.

Speaking at the conference Dr.R.Seetharaman highlighted the factors which resulted in Qatar and UAE to obtain emerging market status. He said “Qatar and UAE have been upgraded to emerging market status from June 2014 by MSCI whose market classification framework includes economic development, size and liquidity. UAE introduced a delivery versus payment (DvP) model and Abu Dhabi’s exchange also put in place buyer cash compensation (BCC), an enhancement to its DvP process which enabled them to address issues relating to custody, clearing and settlement. Qatari companies such as Qatar industries have increased their free float, which has helped to attract more liquidity to the market. Both Qatar and UAE have improved their market accessibility which enabled them to obtain MSCI upgrade.”

Dr.R.Seetharaman gave insight on the impact on account of MSCI upgrade. He said “Qatar exchange, Dubai exchange and Abu Dhabi exchange have witnessed rallies more than 8%, 28% and 12% respectively this year which can also be attributed to MSCI upgrade. The Qatar Exchange (QE) can attract much as QR5bn foreign funds inflow after its upgrade by MSCI to emerging market. Qatar exchange is well set to attract emerging market inflows. The upgrade will enable various corporates in Qatar including family-owned companies to go public. It will also ensure better visibility of the existing listed firms before foreign institutions. The liquid stocks are going to benefit the most. This gives opportunity for Qatar to open the market to foreign investors and affirms the commitment of Qatar to transform into a regional investment hub. There may be shift towards enhanced regulation, more transparency and a lot more maturity in the way that the markets expect issuers to behave. This will also encourage investor confidence, both from global investors and from regional investors.”

Dr. R. Seetharaman highlighted how Qatari companies should leverage on this development. He said “There should be extensive efforts to provide an investment environment that is more attractive for foreign investors to direct their investments towards the Qatari market by encouraging several listed companies to increase the maximum ownership percentage allocated for non-Qataris. MSCI upgrade is also an opportunity for companies to give more emphasis on corporate Governance and thereby encourage foreign ownership. This will enable them to improve their market capitalisation.”

Dr. R. Seetharaman gave insights on various initiatives brought by Qatar exchange in recent years. He said “Qatar exchange in which the NYSE Euronext has 12% stake introduced Universal trading platform, a state of art trading system in 2010. It also extended its trading time since 2011. It launched new equity indices in 2012 covering sectors such as Banks & Financial Services, Industrials, transportation, Real Estate, Insurance, telecom and Consumer goods.

In his concluding remarks Dr. R. Seetharaman said Qatar exchange is well set to attract emerging market inflows.