Time for Change

What benefits have recent upgrades brought to the Qatar Stock Exchange?

We had two significant upgrades from the global index benchmark providers MSCI and FTSE. The upgrade to emerging market status brings significant benefits to the market including companies, brokers, and investors. We are effectively the largest emerging market in the MENA region as per MSCI and FTSE. We saw capital inflow of more than USD2 billion as a result of these two upgrades. It has also opened up the Qatari market to a number of long-term global institutional investors like pension funds, sovereign wealth funds, and large emerging market passive investors. Our listed companies now have access to a global institutional investor base that will facilitate them in further capital raising should they wish to increase their capital in the future. I would say that we still haven’t completely realized the full potential of becoming an emerging market given all of the uncertainty surrounding us—the wars in Syria, Yemen, and the declining oil prices. But in short, the upgrades have really served to bolster our key measures.

How is the Qatar Stock Exchange working to provide a diversified range of investment and trading opportunities?

Our strategy is to provide a platform to our customers where they can trade multiple asset classes with varying trading strategies. We have been working on a number of things to improve the investment environment and to support our global investors. We are developing new tools and introducing them into the market. For example, in the past year we have introduced the LP, which is the liquidity provision. We also introduced margin trading and are planning to list ETFs in the first quarter of 2017. There are few things that still need to be implemented, like regulated covered short-selling, securities lending and borrowing, and omnibus accounts. We are trying to provide our investors with all of these tools. One of our achievements last year was that we managed to list Qatar First Bank. We are also working with a number of family-owned companies to bring them to the market. There are a few in the pipeline with potentially two IPOs in the first quarter of 2017.

How is the Qatar Stock Exchange supporting SME development?

We recognize the importance of SMEs and their contribution to the market and to GDP. Most of these companies are family-owned companies that are trying to grow, and their growth potential is much faster than other sectors. Therefore it is important to provide them with financing opportunities and the ability to access business and sector expertise. The Qatar Stock Exchange offers all of these opportunities to SMEs. There is also an opportunity for SMEs to network with potential foreign partners through the stock exchange. Most of the employment in Qatar comes from these SMEs and we are therefore trying to assist them in as many ways as we can. SMEs often play an integral role in the smooth operation of some of Qatar’s largest companies, and we are therefore highly focused on ensuring these businesses are given the opportunity to thrive.

What drives the creation of new products like the capital markets for SMEs and the new ETFs you have unveiled?

The idea is to provide our customers tools to diversify their portfolios via investment opportunities at QSE. We are working on SMEs, equity, and commodity ETFs, Real Estate Investment Traded Funds (REITs) and other tools like covered-short selling and securities lending and borrowing to unlock the liquidity and allow it to flow into different asset classes. We are working within the framework of Qatar National Vision 2030, and this is the guiding light for many of our initiatives. We are trying to create a modern economy, and that means the QSE needs to facilitate a vibrant efficient financial market in Qatar. We understand what the market needs to achieve this development and we are trying to facilitate its transformation in every way. Our expertise in capital markets also directs our program and product development.

What activities and programs does the Qatar Stock Exchange have for promoting investment awareness in Qatar?

We have a number of education programs directed at public and private high schools and universities that promote market awareness. For the last two months we have also been holding seminars with brokers and other stock exchange participants to teach them about the new ETFs and how they work. We have programs with most Qatari universities. We have a program with some of our university partners whereby we hold weekly public information sessions aimed at teaching them about markets and investments. Over the course of the year, more than 2,000 people attended these seminars. We want to make sure that we have educated investors who are fully aware of the machinations of the market and the available investment tools and technical analysis techniques.

What effects will potential US Federal Reserve rates increases have on the Qatar Stock Exchange?

An increase in rates will give investors across the globe more options, and an increase will influence every aspect of the global economy—currencies, oil prices, everything. However, given the strength of the Qatari market, the stock exchange offers enticing yields for investors, and it will continue to draw international investors.

What is the goal behind the Qatar Stock Exchange’s Investor Relations Excellence Award Program?

The program is important to improve investor confidence. We have found that investors are more willing to invest in firms that are accessible and open. They prefer companies with strong transparency whose management teams are welcoming. This award aims to stimulate this sort of openness by generating a sort of transparency competition among Qatari firms. Simultaneously it is aimed at increasing awareness. We are trying to encourage companies to have IR departments, and we are trying to show them the importance of courting investors.

What is your outlook for the next 12 months?

I am looking forward to the coming year because we will be unveiling new products like the ETFs, and we will be taking at least two family-owned companies public. I expect to see more family-owned companies approaching the exchange and asking about the process for going public, and I hope to be able to assist as many companies as possible in this. Next year will be a good year for the Qatar Stock Exchange. We hope to see an increase in oil prices as well, which will serve to boost both the sector and our business.