By Satish Kanady
DOHA: World’s top fund managers, who never bothered to look at Qatar until recently, has started showing interest in Qatar after the local bourse’s upgrade by global index compilers like MSCI and S&P Dow Jones. “There is a big school of investors who hardly showed any interest in Qatar is now definitely looking at Qatar. They are travelling to Qatar, meeting up with decision makers”, a top investment expert has said.
Talking to The Peninsula on the sidelines of 5th annual IR conference yesterday, the equity research analyst, who doesn’t want his name in print as he was not officially authorised to speak on behalf of the global financial services company he represents, said global investment banks expect rapid rise in foreign institutional investment in Qatari market.
“Global funds have realised Qatar has a very interesting story. Fifa is coming up, infrastructure development is huge, the leadership is very good , the local economy is well- disciplined..It is not difficult story to catch..But on the valuation side, Qatar is currently going on a premium rate...”, he said.
The upgrade of Qatar by global index compilers MSCI and S&P Dow Jones will help widen the geographical base of its investors. It is also expected to lift the investor profiles. Before the upgrade, most of the Middle East money used to settle in London, New York and Boston. Now, Qatar is increasingly getting enquiries from London, Hong Kong, Frankfurt, Paris and San Francisco. The school of investors who were looking at this region is significantly changing, he said.
The reclassification of Qatar to emerging market status is also significant across the region. It will help raise the profile amongst active investors around the world; it will also increase the level of index investment the Qatar market is exposed to.
He said Saudi Arabia’s announcement to open up its market is not going to have any immediate impact on Qatari market.” Saudi getting upgraded to the Emerging Market is a 2017 story. If Saudi opens up then portfolio rebalancing could see some money moving out of Qatar, UAE and Saudi Arabia and Egypt. Until it happens, Qatar need not worry about it.”
On Qatar’s market transparency issues, he said situations have changed across the region over the past several years and Qatar’s market regulatory body is taking encouraging steps to enhance the disclosure practices matching global standards. “But I would say there is still long way to go to improve much further...”
Downplaying the theory that Qatar banks are over-exposed to real estate sector, he said: “Not just Qatar, banks in the entire region are exposed to real estate sector. The story about the GCC is building infrastructure. Fortunately or unfortunately, most of the emerging economies are exposed to construction and real estate sector, unless we talk about mature economy like the UK. “This region has wealth and there is motivation …. Whether the regulators like it or not, we will be exposed to the construction sector”.
The Peninsula
DOHA: Given the changes in market dynamics after Qatar Exchange’s (QE) upgrade by MSCI and S&P Dow Jones, the QE management will launch a series of consultations with key market players starting October 2014. The idea is to further boost the market liquidity.
Qatar bourse said yesterday that its Index Committee, chaired by Dr Saif Saeed Al Suwaidi and the members who represent independent members, brokers and listed companies and observers from Qatar Financial Markets Authority (QFMA), will review the index methodology applied to QE indices . The Peninsula
