Doha’s capital market is all set to see three more listings, including one in the venture market, as the procedural reforms as direct listing and book-building mechanism ought to attract more companies, according to a top official of the Qatar Stock Exchange (QSE).
“The new procedures like book building and direct listing will attract more companies to the Qatari market,” QSE acting chief executive officer Abdul Aziz Nasser al-Emadi told the media Monday on the sidelines of the listing of Beema.
At present, MEEZA and Dukhan Bank are the prospective entrants in the main market and another one will be listed in the venture market, he said, without divulging the details regarding the proposed entity in the junior bourse, which now has only one constituent Al Faleh Educational Holding.
Dukhan Bank has received approval from its shareholders to go public through direct listing, which is a process through which an entity becomes public without the initial public offering and does not require underwriters. Moreover, it increases liquidity for the existing shareholders.
Beema or Damaan Insurance Company, a Shariah-principled risk cover provider, Monday made its entry into the trading ring of the Qatar Stock Exchange through direct listing.
However, MEEZA is entering the QSE through book-building process, which is a first of its kind in the country’s capital market.
Akber Khan, Senior Director, Al Rayan Investment, told Gulf Times that the IPOs are the lifeline of public equity markets so investors will relish the addition of new companies.
“With the World Cup related pause in 2022 behind us, we expect the first half of 2023 to be an active period for new issues on the QSE,” he said, highlighting that foreign investors were net buyers of more than $4bn of Qatari equities in 2022.
For equity markets globally, any firm indications that the US interest increases are nearing an end would be taken very positively and cyclical companies would rally hardest, he said.
"Global equity investors have a mixed view on Qatar and the Gulf. On the one hand the region is relatively defensive compared to other emerging markets; countries have robust finance and there is no worry about currency depreciation against the US dollar. However if China continues to reopen, which would help many of the Asian economies, there would likely be better opportunities in other markets," he said.
Asked about the present higher interest rates and its impact on the local equity sphere, he said higher bank deposits rates are certainly a compelling alternative for some equity investors.
"But a strong fundamental equity investment case would generate returns far in excess of a deposit over 12-18 months, assuming investors are willing to assume additional risk and volatility of returns," he said.