“IPOs are a market fuel,” the bourse’s chief executive officer Rashid bin Ali al-Mansoori (pictured) said in an interview in Doha. “Family-owned companies which are mainly in the non-oil sector are playing a big role in our economy. Some of them are now being run by the third generation. We are encouraging and incentivising them to come for a listing.”
Qatar Pharma submitted papers to list and Rayyan Water is also in the process to sell shares, al-Mansoori said. Food producing company Baladna already announced plans for an initial public offering, he said, adding that the listing of Qatalum, Qatar Petroleum’s aluminium smelter, “should be happening in the next few weeks.”
Qatar’s benchmark stock index has recovered last year’s losses incurred after the start of the blockade. The gauge is up 15% this year, the most globally in US dollar terms, versus a loss of 11% for the MSCI Emerging Markets Index. However, the strong rally hasn’t translated into a boost in volumes, with daily trading remaining lower than in 2014, when MSCI included Qatar in its emerging markets category.
“To improve the market liquidity we are doing IPOs, introducing new products and working with regulators to make the environment more encouraging for foreign investors,” al-Mansoori said. While foreigners own between 10% and 12% of total shares traded locally, they are responsible for more than 30% of the daily value traded, he said.
The stock exchange is trying to expand its investor base by penetrating into Asia with roadshows, besides continuing investor engagement in Europe and America, he said.
The exchange is also looking to introduce single stock derivatives next year. “We are laying the ground for the market framework and working closely with the regulators in this regard,” al-Mansoori said.
To ensure that Qatar’s weighting in MSCI and FTSE Russell’s emerging-market benchmarks is not diluted once Saudi Arabia is added to the gauges in 2019, the Qatari regulator is working with companies to improve liquidity. More exchange-traded funds are also planned, he said.
“We have a pipeline of good companies to list,” he said.
