The recent listing of Al Faleh Educational Holding has prompted a spate of small and medium enterprises (SMEs), especially start-ups, to increasingly show interests in tapping the Qatar Stock Exchange's (QSE) venture market QEVM.
The QSE chief executive Rashid bin Ali al-Mansoori said the bourse has noticed “a large turnout” of SMEs inquiring about the requirements for listing in the venture's market.
"We welcome all startups and confirm QSE’s readiness to assist them to list and benefit from lighter and flexible regulations," he said in a tweet.
His statement comes after Al Faleh recently started trading in the QEVM. It was the first entity to start trading in the junior bourse.
The first educational entity to trade in the QSE’s 24 years history was included under a special mechanism of direct listing, which allows the issuer to access the market without the need for a public offer.
The Qatar Development Bank (QDB) has been playing a pivotal role in supporting the QEVM by assisting SME’s to transform into public shareholding companies and providing them with the required financial and consultative assistance.
Highlighting that SMEs greatly help Qatar’s diversification drive; QDB chief executive Abdulaziz bin Nasser al-Khalifa had said more than 96% of the 25,000 private sector entities currently registered in the country are classified as SMEs.
According to Ministry of Finance forecasts, local firms could provide up to 90% of supplies for state projects in the coming years, with the authorities looking to improve the capacity and diversification of services offered by SMEs.
The Qatar Financial Market Authority has stipulated that the companies wishing to enter QEVM should have a minimum subscribed capital of QR2mn and free float of 10%.
Companies listed on the QEVM will pay a flat fee of QR50,000 per annum and the prospective issuer should have a listing adviser, who in turn, will liaison with the authorities for the approval and the subsequent listing.
The QEVM is aimed at small and medium sized family and private companies and provides them with access to capital market and enables them to diversify their source of financing, achieve sustainability, growth and expansion.
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.
Highlighting that the SME sector is important in the ongoing growth of Qatar’s economy, the QSE said the QEVM "is specifically designed to fit within the country’s overall desire to support SMEs encapsulated in the many government-led initiatives in the area and as part of the ‘Qatar National Vision 2030".
The establishment of QEVM rests on the fact that the economies in both the developed and emerging markets are founded on the success of SMEs, which contributed to employment opportunities, wealth creation and increased output.