State plans two mega firms for investment

February 11, 2013 - 4:26:45 am

DOHA: With more than $150bn expected to be spent on infrastructure development in the country over the next 10 years, the government is all set to launch a publicly-traded mega infrastructure investment company to ensure that Qatari people and businesses are directly involved in the development process and benefit from it financially as well.

Another similar initiative is being launched whereby citizens and private companies will become direct stakeholders in the wealth that gas-rich Qatar regularly invests abroad for strategic long-term gains.

The state yesterday announced the above two initiatives, namely, Infrastructure Investment Company and Doha Global Investment Company, and said the two mega companies will be listed on Qatar Exchange.

Although no further details were given, businessmen and analysts believe the capital of the two mega entities would be in billions of riyals and at least 30 percent of the shares could be open for subscription to the Qatari people and businesses via initial public offerings (IPOs).

“The proposed firms might be like when the state launched Industries Qatar (IQ) early last decade by clubbing four state-owned companies together and putting them under this holding company and launching a mega IPO to ensure that citizens had a direct stake in big state-held businesses,” said Yusuf Al Kahloot, a prominent stock and financial analyst.

Qatar News Agency (QNA) reported yesterday that the Emir, H H Sheikh Hamad bin Khalifa Al Thani, chaired a meeting of the Supreme Council for Economic Affairs and Investment where the above decisions were made.

According to Al Kahloot, the proposed companies would ensure a gush of liquidity into the local stock market. “The market is currently having liquidity-related woes.” Presently, it is the Qatari Diar which is making investments in infrastructure, both locally and overseas, he said talking of the Infrastructure Investment Company. The infrastructure company might do mega development projects like schools, hospitals, roads and sewage, Al Kahloot added. 

Prominent businessman, Ahmed Al Khalaf, while lauding the announcement, said there is huge wealth in Qatar but there is a flight of capital since there is a lack of investment avenues here.

The two companies would make sure that large parts of the Qatari capital that is parked abroad, would come back, said Al Khalaf.

Details are not available, but it is understood that the two companies would make investments locally as well as overseas, he said. “People are happy as the ordinary Qatari investor would benefit immensely from the IPOs.”

  Asked if construction and contracting companies would be fearing competition from the infrastructure investment firm, Al Khalaf said that on the contrary the private sector would get a great opportunity to invest in infrastructure. “The main beneficiaries of the two companies would be ordinary Qatari investors.”

The infrastructure investment company might do projects like power and water generation, aside from setting up industrial areas, schools and hospitals, said Al Khalaf. “People have pots of money so they would invest in the two companies.”

  Meanwhile, an analyst not wanting his name in print said that it would not be advisable if the infrastructure investment firm launches sub-contracting companies for each sector — such as for schools, hospitals, sewage systems — separately. “It would be unwise to do that because sub-contracting firms always delay a project,” said the analyst. “This will be the first major infrastructure investment firm in Qatar.” “People would financially benefit from the mega development projects in the country,” he added.

  The Peninsula