‘QP decision to help it focus on core areas while adding depth to QSE’

Qatar Petroleum’s (QP) decision to offload 49% stake in Qatalum (Qatar Aluminum) through an initial public offering (IPO) will bring depth and diversity for the market and also help streamline the country’s oil major to focus more on core hydrocarbons.“It is very positive for the market. With aluminium prices remaining high, it is a good investment opportunity for the investors,” Talal Samhouri, head of asset management, Amwal, told Gulf Times.Asked about the difficulties faced by the global aluminium smelter plants due to high cost of production, he said for Doha, it is less of an issue, as the feedstock for Qatalum comes locally at very competitive prices.He said the proposed maiden offer would not only bring depth and diversity to the market across sectors but also help streamline the operations of QP to focus more on core product portfolio.It is expected that the offer will hit the market by the end of this year. Investors are awaiting the prospectus to get finer details regarding the offer.Samhouri said the country’s hydrocarbons bellwether needs to not only spin off certain entities such as Al Koot Insurance and Reinsurance but also enhance free float on other subsidiaries like Industries Qatar to better attract foreign investors.It’s high time that Al Koot Insurance and Reinsurance is spun off and floated as there is a dire need for more liquid listed insurance companies, he said. At present, the Qatar Stock Exchange has five listed risk cover providers: Qatar Insurance, Qatar General and Reinsurance, Doha Insurance, Qatar Islamic Insurance and Al Khaleej Takaful.Samhouri said potential also exists for other subsidiaries such as refineries, industrial cities and those related to project management to be spun off into public holding entities.In its 2013 strategy, QP had said it was contemplating a series of IPOs for its subsidiaries over the next 10 years, after launching the maiden offer of Mesaieed Petrochemicals Holding Company.The series of IPOs come under QP’s 10-year investment and savings programme that seeks to offer Qatari citizens the opportunity to share in the country’s current and future wealth.The Supreme Council of Economic Affairs had made a presentation regarding offering shares worth QR50bn of several state-owned companies to Qataris over a period of 10 years.Samhouri said there is also a need to enhance the free-float in the entities such as IQ, Gulf International Services and Mesaieed Petrochemical Holding Company as it would better appeal foreign investors. Recently, hordes of listed companies including IQ, GIS and MPHC decided on a higher up to 49% foreign ownership limit (FOL).The IPO activity (in the Middle East), which was relatively slow in the first quarter, is expected to pick up during the last two quarters of this year, Mayur Pau, financial services IPO leader, Ernst & Young, said recently.