The Qatar Stock Exchange (QSE) yesterday urged private and family-owned companies, which constitute more than 80% of the country’s fast growing non-hydrocarbon sector, to go in for initial public offerings (IPOs) and thus get listed in view of the umpteen advantages.
For some of those companies, “there will come a time when benefits of being listed become more tangible as businesses develop, grow and take on new challenges,” QSE chief executive Rashid bin Ali al-Mansoori (pictured) told yesterday in a seminar jointly organised by PricewaterhouseCoopers and Latham & Watkins.
He said many advantages of this change on the future of those companies include continuity, organisational efficiencies, diversification of funding options and optimal financial status.
Finding that IPOs in the Middle East have kept a low profile in recent years, he said “in Qatar, as with most GCC (Gulf Cooperation Council) markets, volume has been reduced significantly.”
In Qatar, the last listing was of Mesaieed Petrochemical Holding Company - a holding entity of Q Chem, Q Chem-II and Qatar Vinyl Company - in 2014 and before that, it was Vodafone Qatar and Mazaya Qatar.
“Being the second largest stock exchange in the Middle East and North Africa and the Gulf region, this (low IPO volume) does not meet our ambitions, therefore, we are already working alongside a number of private companies and their advisers in preparing themselves to come to market, both for the main market and the QE Venture Market,” he said.
Highlighting that family and private companies account for more than 80% of the non hydrocarbon sector; al-Mansoori said “we believe that you will see a growing number of case studies that will showcase the benefits of having access to the public markets.” He also touched on some discouraging concerns as dilution, loss of control, corporate governance rules and transparency and disclosure requirements.
“Many companies, and not just in the GCC, see the first day of trading as the end of the process; for your company to maximise the benefits of listing this should not be the case and in fact practices once listed are as important the listing process itself”, he said.
“As you think about the most successful companies in the world, including those here in the region, many of the names that come to mind are still likely to be those that are publicly listed; if your legacy is to be a business still thriving in not ten years but one hundred years creating a publicly listed vehicle with permanent capital, professional executive management but still with the protection for your family has to be an option,” he said.