The Qatar Development Bank (QDB) plays a central role in supporting the Qatar Stock Exchange’s (QSE) venture market (QEVM), where the trading of the first entity will begin next week.
“The QDB plays a pivotal role in supporting the QEVM through assisting the small and medium enterprises (SMEs) to transform into public shareholding companies, providing them with the required and consultative assistance.” QSE chief executive Rashid bin Ali al-Mansoori tweeted.
He said both the QSE and QDB share the goal of supporting the private sector and its contribution to the national economy based on the strategy of sustainability and economic diversification in accordance with the Qatar National Vision 2030.
The QDB had entered into a memorandum of understanding (MoU) with the QSE in 2017 whereby the development institution would assist the proposed SMES with the fees payable to listing advisers and other costs associated with the listing.
The companies listed on the QEVM will pay a flat fee of QR50,000 per annum, the bourse said in its website.
With the addition of the QEVM to the product suite, the QSE would provide young and entrepreneurial companies a customised route to market to ensure they have access to the necessary funds to contribute to Qatar’s economy, sources in the bourse said.
A Clyde & Co article said the establishment of a secondary market would give SME owners an opportunity to be listed in the bourse in accordance with lighter and flexible regulations, while giving further finance sources in order for them to grow and expand their businesses.
In January 2012, the bourse established a separate stand-alone venture market, stipulating eased entry norms as well as lower capital base and shareholders, but made mandatory liquidity provider and perpetual services of listing adviser.
The recently released Qatar Capital Market 2020 report, prepared by the Qatar Financial Center, had said the QEVM serves as a dedicated stock exchange for SME listings, which, despite possessing possibly shorter track records and higher risk profiles, allows them to access funding through the equity capital market.
Al Faleh Educational Holding, which runs Doha Academy and AFG College with University of Aberdeen, will foray the QEVM on April 13, making it the first to get listed on the venture market.
The QSE has been keen on boosting listings from family-owned companies as well as SMEs on its parallel venture market.
As regulatory requirements for the publicly listed companies could pose a strain on SMEs’ capabilities, the capital market report said the venture market imposes lighter listing requirements for the size of listed capital and their profitability track record.
"To garner more listing interests, it is recommended to reduce the frequency of disclosure reports to annual reporting," it added.
Abdulaziz Nasser al-Emadi, director of QSE’s Listing Department, expressed the hope that more companies would join the QEVM in the coming period.
The companies eligible to join the QEVM should have an issued capital not below QR2mn, and number of shareholders not less than 20 who own no less than 10% of its capital upon the listing.