Qatar Stock Exchange’s CEO on the market

• On foreign investment: “Qatar’s energy sector is characterised by an open and welcoming environment. Most of the companies are up to 49% open for foreign investment with no tax, free money movement and ease of trade. From our side, I can say that the new FDI law is very welcome. It will not only bring money into the country; it will bring experience that we need in Qatar. It will help diversify the economy.”

• On SMEs: “We are helping to diversify the economy by promoting SMEs and startups in Qatar. We opened the Qatar Venture Market and are in the process of announcing additional programmes for SMEs. We now have a number of SMEs in the pipeline to be listed next year.”

Most TOGY interviews are published exclusively on our business intelligence platform, TOGYiN, but you can find the full interview with Rashid Al Mansoori below.

How do you view the current market for foreign investors in Qatar’s energy sector?
Qatar’s energy sector is characterised by an open and welcoming environment. Most of the companies are up to 49% open for foreign investment with no tax, free money movement and ease of trade. From our side, I can say that the new FDI law is very welcome. It will not only bring money into the country; it will bring experience that we need in Qatar. It will help diversify the economy.
Qatar is clearly open for foreign investors. Once they open an account in Qatar, they can easily trade in our market. The Foreign Ownership Limit [FOL] stands at 49% for many oil and gas companies. For instance, Industries Qatar announced earlier this year an increase in their FOL to 49%.
We have seen a lot of interest coming from investors since our weight was increased in the MSCI Emerging Markets index after we opened up to foreign investors. We saw a big inflow to the tune of USD 1.5 billion coming from foreign investors immediately after the increase. The total foreign trade on the exchange so far this year is around QAR 22 billion [USD 6.04 billion]. So overall FDI is increasing. The overall value of transactions is also up. QAR 53 billion [USD 14.6 billion] of stocks have been bought and sold so far this year.

You set an ambitious goal of listing 35 companies over the next five years. Are you on schedule for achieving that?
I have three companies in the pipeline for this year [2018]. They applied this year and filed with us. We have a wide range of businesses, from food to real estate to chemicals, that have either submitted their applications or will do so in the near future. We have also been talking to some in the medical sector that we want to list, and we are targeting the education sector.
It is our ambition to list these and other companies. We are working on it. Whether we will achieve our target will depend on the assistance we get from the private and public sectors and from the regulators. As we say in Qatar, you cannot clap with only one hand.
This year we have listed one company and two ETFs [exchange-traded funds]. One of these ETFs is linked to an Islamic index and is the largest single-country Islamic ETF worldwide. In the short term, the most imminent listing is Qatalum.

Do you see a concerted push by Q-companies to go public?
QP had a plan of listing a number of its companies. When they listed Mesaieed Petrochemical Holding Company in 2014, they announced that they would list five companies over the next 10 years. I am sure they have plans and strategies for when to list these companies.
QP CEO [Saad Sherida] Al Kaabi is very supportive and committed to helping the market. For example, he was very supportive when it came to increasing the FOL, most prominently with increases to 49% for Mesaieed and Industries Qatar. This is a very good example of QP supporting the financial market.

How is the QSE contributing to the 2030 vision in regards to improving economic competitiveness and the knowledge-based economy?
If you look at the indicators, the exchange is very competitive. In the Arab world, we are almost number one. We are very advanced by worldwide standards.
We are helping to diversify the economy by promoting SMEs and startups in Qatar. We opened the Qatar Venture Market and are in the process of announcing additional programmes for SMEs. We now have a number of SMEs in the pipeline to be listed next year.
In addition, we are one of the key venues in the country when it comes to attracting FDI. The easiest way to invest in Qatar is to bring your capital to the market. In just a few hours, one can buy and sell in the market.
We have two ETFs, which give investors the opportunity to buy a single share in a fund which tracks either the top 20 stocks or the Al Rayan Islamic index. That is how we are trying to improve investment opportunities for foreigners who live in Qatar but do not know how to invest. We are very keen to promote the market to local investors. We have 2.7 million people living in the country, and most of them are expats.

What measures has the QSE pursued to encourage investment in the exchange?
We started a big campaign two years ago with Hamad University to educate people about investing in the stock exchange. We held training courses on technical and fundamental analysis of stock markets. We hosted about 2,000 to 3,000 people. We will do this again in 2019.
We also try to find solutions for big sectors. I have seen people who have worked here for 20-30 years deposit their money in the bank at low interest. If they know about the stock exchange, and put their money in a stock for five years, it will appreciate at a greater pace than with a bank and also benefit from dividends paid by the companies. But you need to pick your stock. We need to find more solutions for prospective investors.

Do you see an increase in support for SMEs from the banks?
We are a small country, and the banks are still generous with our SMEs. The reason why we are opening an SME market is to provide an alternative financing venue for these SMEs. QDB [Qatar Development Bank] also has a lot of programmes that support and finance these businesses.
Most SMEs here are owned by Qatari families. It is not like in the West or Asia, where the SMEs start with financing. People here can finance themselves, and the banks do help.

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