By Satish Kanady
DOHA: The global index provider FTSE Russel has expressed its complete satisfaction over Qatar Exchange’s (QE) market initiatives in the run up to the inclusion of its 50 percent stocks in its Emerging Market index during the review scheduled in September 2016.
“We are glad to say that Qatar Exchange is extremely engaging with us. During the monitoring process it has been assessed that Qatar is sitting on a pretty comfortable position,” Jonathan Cooper, Managing Director, Middle East & Africa, FTSE Russel told The Peninsula in an interview.
Following QE’s upgrade by FTSE from Frontier Market to the Emerging in September 2015, the Qatari market was initially estimated to attract $1bn of inflows, considering roughly $70bn currently passively tracks the FTSE Emerging Markets Index. After considering Qatar’s weighting recently, the FTSE country classification committee observed that Qatar Exchange will see $1.2bn of passive inflows, Jonathan said.
In September 2015, FTSE announced that Qatar’s inclusion as a Secondary Emerging market status will be effected in two tranches. The first tranche of 50 percent will be implemented in conjunction with the semi-annual review of FTSE Global Equity Index Series (GEIS) in September 2016 and the remaining 50 percent will be included during the March 2017 review.
Explaining on the classification process, Jonathan said, “we consider the quality of market. The quality of regulation, the dealing landscape, custody and settlement procedures, and the presence of a derivatives market would all be taken into account. Upgrades would only occur in response to permanent changes in market status and global acceptance. International investors should be able to invest and withdraw funds in a timely and secure manner at reasonable cost.”
“We must say that Qatar exchange is enormously engaging with us during this review period. They are meeting with top international institutional investors, holding road shows and is pushing the market forward,” the FTSE Chief noted.
On the decision to include Qatari stocks in two tranches, Jonathan said: “We don’t want to see a negative impact after the inclusion. So it is sensible to give 50 percent in the first phase. What we will be looking at during the review period is that the companies haven’t change. We will be using the same screening methodology of these 50 percent upgrade”.
The inclusion of Qatar Exchange in the emerging market index is not the end of the process, it is the beginning. “The companies that meet our criteria will be included in our global indexes. We have sharia’h global equity index, real estate index. Qatari companies that meet our criteria will be included in these indexes,” Jonathan said.
The Peninsula
