BY Satish Kanady
DOHA: Qatar’s stock market jumped to its highest level since September 2008 yesterday after an upgrade to emerging market status from frontier-market status by index compiler Morgan Stanley Capital International (MSCI). The upgrade is expected to give a significant boost to foreign investment in Qatari shares.
The much-awaited reclassification was announced late on Tuesday after MSCI’s 2013 Global Market Accessibility Review.
The announcement had an immediate impact on Qatar’s market as the local bourse’s benchmark index surged to 9,517.95 points, adding 163.45 points or 1.75 percent yesterday. Among the top gainers were Qatar National Bank, up 4.02 percent to QR155.40, Industries Qatar, which rose 2.66 percent to QR166.20, Commercial Bank of Qatar, which gained 1.13 percent to QR71.30 and Qatar Electricity and Water, up by 6.15 percent to QR157.10.
“The decision is a positive step towards development of Qatar Exchange and in attracting foreign investments,” said Qatar Exchange CEO Rashid Ali Al Mansoori. “It reflects the recognition of the positive steps made by Qatar Exchange over the past years to meet the MSCI requirements, in terms of the development of the market infrastructure and the implementation of a number of important projects and initiatives, which were welcomed by the international financial and investment institutions.”
The UAE too was elevated to the emerging market status. MSCI, whose equity indexes are tracked by investors with about $7 trillion in assets, will promote both countries from frontier-market status as of May 2014.
MSCI’s decision is an important step in developing Qatar as a destination for equity investment and helps support the markets.
The index compiler said: “MSCI welcomes the progress made to date and the further commitment of the Qatari authorities to increase the Foreign Ownership Limit (FOL) levels applied by Qatari companies.
“While the current level of foreign ownership in Qatari shares is well below the limit, the Qatari authorities should actively continue to increase them above 25 percent in order to mitigate potential issues arising from increasing foreign capital inflows,” it noted.
The Peninsula
