The stage is set for smooth and speedier initial public offerings (IPOs) and follow-on issues and the newly introduced single window system by the Qatar Stock Exchange (QSE) is expected to fasten the listing of exchange traded funds, according to a top official of the bourse.
“It will speed up the process because we work with the companies a year before the listing,” QSE chief executive Rashid bin Ali al-Mansoori told reporters when asked what changes would the latest move of allowing QSE to receive the applications for public offering, listing and admission to trading, bring to the market.
Highlighting that all the offers, whether primary or secondary, have to come to the stock exchange, he said a special listing committee, comprising members of the QSE and the Qatar Financial Market Authority (QFMA), will look into all the aspects of listing and trading.
Once the application is approved by the committee, it will take only a few days for the QFMA to approve the same, which will ensure speedier process, he said.
Previously, the applications regarding the offers had to be directly sent to the QFMA but now the new single window system will be the nodal point, which will vet the applications based on the broad guidelines set by the QFMA.
“The move should make it easier for issuers processing their applications,” the London Stock Exchange-listed Qatar Investment Fund had earlier said.
The prospective issuers wishing to offer or to list their securities on the stock market shall submit their applications to the QSE listing department, which is the competent party to receive offering/listing applications.
“Now with the single window system, we also expect to see the listing of exchange trade funds (ETFs),” al-Mansoori said.
The new system comes amidst reports that QSE is ready to launch three live ETFs.
The three ETF projects intended to be launched in Qatar are an ETF based on government fixed income risk from an Asian borrower, another one based on a representative Qatar-country index and a Shariah-compliant product.
The expected launch of ETFs also comes in view of the QSE allowing liquidity providers, which play a crucial role in ensuring that the ETFs trade at fair value.
QNB and Doha Bank had earlier announced its intention to launch an ETF on the QSE which would provide investors with exposure to the index benchmark with a single trade.
Islamic lender Masraf Al Rayan is establishing an ETF, which will be the largest in the market. The proposed ETF would involve trading Shariah-compliant stocks on the domestic bourse tracking Al Rayan Islamic Index, which was introduced in 2014.
The move to launch ETFs comes in the backdrop of the upgrades of the QSE by MSCI, Standard & Poor’s-Dow Jones and FTSE Russell.
Qatar could expect to see total emerging market ETF buying of $175mn, more than four days of average trading volume seen over the past three months, a Bank of America-Merrill Lynch report had said in a report.
The bourse’s first phase saw reforms in the cash market with an aim to enhance the liquidity in the market by means of introducing liquidity providers and securities lending and borrowing. A part of the strategy in this phase included the launch of ETFs.