Posted on May 04, 2014
Rashid bin Ali Al-Mansoori (pictured), CEO of Qatar Stock Exchange (QSE), stressed the importance of the recently adopted decision upgrading Qatar to emerging -market status by MSCI World Index, which is to be effective on June 2, 2014. Such achievement represents an additional element of success to QSE‘s continued successes throughout the pervious years in terms of developing its basic infrastructure, providing further services and trading mechanisms for investors and apply new tools of investments.
 
Speaking to Qatar News Agency (QNA), Al -Mansoori said the importance of joining the wide range global index stems from the fact that MSCI is one of the pioneer companies in Global Equity Indexes. This new reclassification allows Qatar to be in line with Brazil, Russia, India, China and Turkey in the list of countries attracting foreign investments that apply the MSCI and S&P indices for Emerging Markets, added Al -Mansoori.
 
He expects that the number of the Qatari companies actually qualified for this listing will be around 9 companies, pointing out that names of the companies will be announced by MSCI by 14 May 2014 while they will be officially inducted on the 2nd of June 2014. He added that the entry of international investors into the market will enhance liquidity in the market and the value of many companies and consequently reduces the capital costs related to the investment process and will also increase the positivity of the Qatari market as it will gain global recognition by major investment portfolios and global institutional global funds and that is viewed as an important moral factor for the market.
 
He described the upgrading as an opportunity for a steady increase in the trade volume in Qatar Exchange Market, during the coming few years, that would enhance the upwards trend sustained since the beginning of the year expecting an increase in trading volumes during the next few years compared to the current trading levels. Al-Mansoori stressed that Qatar Exchange is ready to deal with higher trading volumes and has special procedures to control the speculation including the daily index price fluctuation and setting of limits for the daily rise and fall of stock prices of the listed companies.
 
Qatar Exchange was prepared over the last five years to manage large monetary flows and liquidity after finalizing its technological infrastructure, trading systems, electronic control systems and legal procedures, he explained. Al-Mansoori said that the Cabinet’s approval of a draft law exempting non-Qatari investors in the profits of some companies and investment funds from the income tax, will encourage the foreign capital to invest in the Qatari market through exempting non-Qatari investors’ shares in the companies’ dividends resulting from trading in securities and investment fund's units.
 
Qatar Exchange CEO expressed his aspiration for an increase in the quota of foreign ownership in the Qatari listed companies in line with the MSCI upgrade for the opportunity it allows to boost companies’ performance and values and to absorb a considerable part of funds transferred by expatriates in Qatar to their original countries and at the same time protecting the national economy and local investors against all influences that might result from the entry of new foreign investors into the Qatari market.
 
He confirmed that the market is in need of further listings to cope with the accelerating growth in the State of Qatar saying in other words that the number of the current listed companies does not reflect the volume and status of the Qatari economy as influential economic entities are still not operating in the market.

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The listing of such companies will reflect positively on the investors and the overall Qatari economy, thus widening the financial market base,said Al-Mansoori, noting that such a step will avail attractive investment opportunities for Qatari citizens through subscription in new investment channels in light of the comprehensive economic boom in the country and the positive factors in the macro economy. Commenting on the obstacles hampering the listing of companies, which have completed the listing requirements in the Qatar Exchange such as Barwa Bank and Qatar First Bank (QFIB), Al-Mansoori, said we support the transformation of private and family companies to public joint-stock companies prior to listing them in the market. However, we are not the only body that plays this role as approval of competent authorities is more important for the listing, said Al-Mansoori.
 
He urged the concerned bodies to facilitate procedures and solve all pending issues hindering the listing of the said companies, noting the importance of the annual listing of new companies as an important element to maintain stock market performance and balance. He inquired how Qatar Exchange could be the second biggest exchange market in the Middle East with only 43 listed companies therein while less important bourses have more, noting that further listing would produce and increase in liquidity and investor’s confidence , referring in this regard to the positive impact on the stock market performance that has been noticed following the listing of Mesaieed Petrochemical Holding Company (MPHC).
 
Regarding the listing of the emerging small and medium-sized (SMEs)companies, he stressed that the development and success of this market relies on the contributions of the concerned parties in the so called "ecosystem" of this market, pointing in this respect to a number of challenges such as the listing fees, the appointment of a listing adviser in addition to the voluntary disclosure and transparency and the investors’ relations. He also pointed out to the launch of a program to support the listing of the emerging SMEs in collaboration with Qatar Projects as a step towards developing the SMEs sector in Qatar.
 
He noted the importance of coordination as there are various authorities and institutions, which are working in these projects, and every institute has its own initiative, including Qatar Exchange, expressing hope for the allocation of one institution to provide support to these companies until the completion of the listing process, in addition to other government incentives warranting a certain percentage of tenders. He said with the unification of efforts and the allocation of incentives for these companies we will see further listings and accordingly realize a high level emerging market typical to the neighboring countries.
 
Evaluating the government bonds’ performance and the possibility of introducing bonds for trading to companies, he said the diversification of investment tools for the investor is a good factor and it is important to introduce bonds for trading because many national companies introduce their bonds outside Qatar. We work with Qatar Central Bank to finalize the bonds issue as early as possible. He described such a move as a successful experience that supports the investors by providing them with further choices.
 
Commenting on the reasons that prevent the stock market from being attractive to investments despite that the listed companies distribute substantial annual profits, he stressed that such companies have achieved an increase in their net profits during the last year mounting to 11.5 % reaching a consolidated profits to QAR 42 billion in 2013 compared to QAR 37.4 billion in 2012 and accordingly scoring a profit of more than QAR 4.6 billion. Last year's financial results show good growth rates for the majority of the companies compared with the results for the same period in 2012, especially the banking companies and the industry sector, he said, noting that 27 companies achieved an increase in profits last year while 13 companies reported a profit fell and one company reported financial losses.
 
Al-Mansoori said that those companies have achieved an outstanding performance last year, despite the unfavorable global geopolitical circumstances which reflects the strong position of the Qatari economy which would boost, according to analysts to boost the investment climate and maintain the investors. He expressed satisfaction with the QSE's performance during the year 2013 reaching 24% growth in the index, adding that Qatar Stock Exchange recorded the best performance among the Arab stock markets in the wake of the global financial crisis that hit the world markets in 2008, recording the highest index compared to other Arab markets since the beginning of March 2009 until the end of 2013.
 
Al-Mansoori said the global economic crisis had a limited impact on Qatar's stock market from which it recovered quickly, expressing hope that the investors in the Qatari stock market would be aware that Qatar's booming economy, the companies' growing performance and the durability of its infrastructure would protect the market from any external pressures. Granting Qatar Stock Exchange full membership in the World Federation of Exchanges (WFE) is considered as a recognition of the progress it achieved at various technical, regulatory and operational levels, explained Al-Mansoori, expressing happiness to achieve this new step in the context of integration with the global financial markets and stock exchanges, which was reflected in upgrading Qatar by MSCI to emerging market status .
 
He predicted that the performance of the Qatar Exchange for the 2014 would be among the best in the Middle East stock markets because it topped the region's markets during the first quarter of 2014 and will achieve booming trading volumes, based on the steady rise on the turnover and the market index since the MSCI announcement.

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