The Qatar Stock Exchange (QSE) is eyeing further upgrade from emerging market to developed market status and is all set to further develop an efficient market infrastructure, according to its top official.
Moreover, higher foreign ownership limits and liquidity in the listed companies will help the QSE enhance its weight in the present MSCI emerging market index; QSE chief executive Rashid bin Ali al-Mansoori told a delegation of MSCI, which visited the bourse recently.
“We are committed to developing the efficient market infrastructure required for achieving developed market status,” he told the delegation, headed by MSCI chairman and chief executive Henry Fernandez.
The MSCI developed markets comprise Canada and the US in Americas; Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK, Europe and the Middle East; and Australia, Hong Kong, Japan, New Zealand and Singapore from Pacific.
Stressing that QSE will maintain its leadership position in the region by attracting global capital into its financial markets; al-Mansoori said “our strategy has been to continue to increase Qatar’s weight in the MSCI emerging markets index by increasing the foreign ownership levels and liquidity of our listed companies”.
Since being included in MSCI Emerging Markets Index in May 2014, the QSE has seen more than $3bn inflows from global institutional investors.
Apart from Qatar, the other MSCI emerging markets are Brazil, Chile, Columbia, Mexico and Peru in the Americas; Czech Republic, Egypt, Greece, Hungary, Poland, Russia, South Africa, Turkey and the UAE in the Europe, Middle East and Africa; and China, India, Indonesia, South Korea, Malaysia, Philippines, Taiwan and Thailand in Asia.
In order to further increase liquidity in the listed constituents, the QSE had allowed the provision of liquidity providers as well as margin trading, which will be applicable in the 20 stocks in the main index.
An Emiri Decree last year had allowed a higher foreign holding up to 49% of the capital in place of the previous limit of 25% after MSCI and Standard and Poor’s-Dow Jones upgraded the Qatari bourse to ‘emerging’ market from ‘frontier’ status.
So far, Nakilat, Milaha, Ezdan Real Estate, Qatar Insurance, Commercial Bank, Aamal Company, Qatar General Insurance and Reinsurance, Doha Bank, al khaliji and Gulf Warehousing have received approval from the QCSD to enhance the FOL up to 49% and the QCSD has made required amendments to that effect.
Acknowledging that MSCI views the alignment of (Qatari) policy makers on the vision for further development as a positive trend; Fernandez said “our clients, the world’s largest investors, have specific needs with regard to market accessibility. We are happy to be working closely with officials in the QSE to discuss further improvements investors would like to see in the country’s regulatory environment and market infrastructure.”
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