Al-Abdul Ghani presents margin trading details before brokerage houses, investors and media. Margin trading will allow investors to purchase securities that are partially financed by a loan or credit facility made available by a margin lender, a member licensed to provide such services.

By Santhosh V Perumal
Business Reporter


The Qatar Stock Exchange (QSE), which recently introduced margin trading (MT), yesterday said MT will be applicable only for 20 stocks in its main index.
“The aim behind the launch of margin trading is to contribute to the development of the stock market performance and stimulate trading and liquidity. It will enhance market liquidity and provide new financing channels for investors,” Nasser al-Abdul Ghani, QSE market operations and control director, told an awareness session on MT service.
MT will allow investors to purchase securities that are partially financed by a loan or credit facility made available by a margin lender, a member licensed to provide such services.
It is understood that Qatar has adopted a 60:40 method wherein a financial services company funds 40% of the securities’ market value purchased for its client pursuant to the agreement governing the relation between them.
“It will be allowed only in the 20 stocks in main Qatar Index,” a source in the bourse said. Thus, MT will be applicable (as of now) only to Aamal Company, Barwa, Commercial Bank, Doha Bank, Ezdan, Gulf International Services, Industries Qatar, Masraf Al Rayan, Al Meera, Mazaya Qatar, Ooredoo, Qatar Insurance, Qatar Electricity and Water, Nakilat, Qatar Islamic Bank, QIIB, Milaha, United Development Company and Vodafone Qatar.
Since periodic revision of the index takes place semi-annually, the eligible stocks under MT will accordingly change, the sources said.
Asked when MT will start in the market, the source said it depends on the readiness of the brokerage firms. At present, 11 brokerages are in operations. They are Group Securities, Dlala Brokerage, Dlala Islamic, Qatar Securities Company, Islamic Brokerage, International Financial Securities, Gulf Investment Group, QNB Financial Services, Commercialbank Investment Services, Ahli Brokerage Company and Al Rayan Financial Brokerage.
The customers would have to open a new MT account with the brokerage firm, the source said.
As per the Qatar Financial Market Authority (QFMA) rules, it is not permissible to open more than one MT account per person at more than one financial services company. The account is used to deal in securities traded in the market, and must not be used for subscription in new securities’ issuances.
Samer Abu Zaghla of QSE gave a detailed explanation on MT procedures, controls and requirements and explained that the brokers wishing to be licensed as margin lenders can submit their applications for QFMA’s approval.
Earlier on the sidelines of Euromoney Conference, QSE chief executive officer Rashid bin Ali al-Mansoori had said “MT will increase liquidity. It is very important for investors as they have been asking for it for some time.”