The Qatar Stock Exchange (QSE) is contemplating dual listing of the exchange traded funds (ETFs) on Nasdaq, a move that could widen investor base and improve the security’s liquidity.
In this regard, the QSE, which already has two ETFs listed, and another two in the pipeline, had recently explored co-operating with the US-based Nasdaq, it is learnt.
At present, the two ETFs listed on the QSE are QATR, sponsored by Masraf Al Rayan and tracking Shariah-principled stocks, and QETF, sponsored by Doha Bank and tracking the bourse’s 20-stock barometer.
QATR comes as part of Qatar’s drive to enhance foreign investment from Southeast Asia, the UK and Europe.
The QSE began launching alternative investment products with the introduction of two ETFs, which were met with high international demand with two more on the horizon.
The QSE was earlier in talks with an Asian borrower for an ETF based on sovereign fixed income risk.
The asset management landscape in Qatar largely centred on mutual funds in the past, but the introduction of ETFS over the last two years have transformed the composition of the market, said a joint report by the Qatar Financial Center (QFC) and Refinitiv.
The minimum investment in the ETF is the cost of one share, which is less than QR35, whereas investing in mutual funds in Qatar requires a minimum initial investment of QR20,000. “The QSE is home to the world’s largest Islamic equity ETF, offering access to the resilience and robustness of Qatari economy. The QSE also offers access to the blue-chip companies and crown jewels of Qatar in one single trade via QETF listed on the bourse. Both these ETFs have been offered in partnership with QFC-based asset managers,” said its director (Product and Market Development) Mohsin Mujtaba.
Aventicum Capital Management, a joint venture of the Qatar Investment Authority and Credit Suisse, is an active player in the local ETFs. It is now the new manager of QETF, after it purchased several funds and mandates from Amwal in a bid to strengthen its local presence.
The report said Qatar’s robust economy, solid corporate fundamentals and a QR10bn stock purchase programme should provide a “safety net” for Qatari equities during the year despite the challenges from Covid-19.
Although the primary market witnessed slowdown with only four IPOs (initial public offerings) in the past five years; it said the QSE has announced a robust pipeline of upcoming maiden offers from various industries.
“At least, two of these are expected during 2020, including industrial and real estate companies,” it said.
The next addition to the Qatari fund market is set be real estate investment trusts (REITs) after the QFC Regulatory Authority (QFCRA) amended its rules to allow their introduction, while the QSE is looking into listing this type of fund.