Qatar’s QSE plans ambitious programs to secure developed market status

The Qatar Stock Exchange (QSE) has planned out ambitious programs to leverage its infrastructure to secure developed market status as it expects the easing of Gulf tensions and vaccine rollout to bring positive effects on the country’s economy as a whole.

Terming the program as a multi-year process, the chief executive of QSE, Rashid bin Ali al-Mansoori stated that the stock exchange is working in all possible ways to address the points raised by the global index compilers like MSCI and FTSE Russell.

With the normalization of the relations in the region, following the Al-Ula summit in the Gulf Cooperation Council (GCC) where it was decided to lift the blockade on Qatar and it is expected to have a positive impact on the economy.

At the summit, which was mediated by Kuwait, the GCC countries had signed a pact to ensure regional “solidarity and stability” in line with the efforts in resolving a more than three-year boycott against Qatar.

“We have an active program in place to address shortcomings in our market infrastructure as identified by the global index compilers. This program is ambitious but will take some time to complete. As and when all the elements are in place, we can expect the index compilers to start their consultation and review process to assess our eligibility for an upgrade to developed market status.”

The easing of tensions and the normalization of relations has bought some relief to international investors and the QSE has already started witnessing a net inflow of funds from global institutional investors.

However, it is difficult to predict at this stage if the ongoing pandemic and an increase in infection rates would impact this inflow of funds, but from a geopolitical perspective, investors will look more positively at the region as a whole.

When the blockade was imposed on Qatar, there was a notable number of sell-off on the QSE with the majority of the GCC investors, both retail and institutional, closing their portfolios and repatriating their funds.

“With the blockade over, it would be entirely reasonable to expect that the GCC investors would return to our market, particularly considering the quality of the companies listed,” al-Mansoori stated, even though the bourse is not expecting an immediate return of all the investments that were withdrawn.

A return to normality is likely to take a little time with the immediate benefit of investor confidence, as the opening of borders has allowed the free flow of people and goods.

“Both the hospitality industry and consumer goods and services will benefit in due course, as and when the current pandemic restrictions subside. The overall investment climate should also improve as we see the GCC investors return to our market,” al-Mansoori stated.