MARKET CONCERNS

July 19, 2014 - 6:00:49 am

Over the past few years, Qatar’s capital market has seen steady growth in terms of turnover, trading volumes, market capitalisation and market intermediaries.

The number of investors participating in the market has also increased. Registered investors in Qatar Exchange increased to 968,000 in 2013 against 914,000 in 2012, reflecting an increase in the trading volume.

This is largely attributable to the country’s economic growth. Unfortunately, grievances on the part of investors on a wide range of issues have also been on the rise. Grievances against listed companies include misleading, inaccurate and insufficient disclosure of information and actions or inaction detrimental to the interests of shareholders.

Inquires with a cross section of market players in Qatar has proved that investors want more information about the investments of their funds. They complain that listed companies often shy away from disclosing details of major deals with other entities, which is a clear case of violation of market regulations. 

“These companies often prefer to limit their disclosures to a two-line media statement. The media, which is supposed to be a major source of information to the investors, is either not bothered about looking into the details of the deals or they do not want to offend these companies which are their major source of advertisement revenues”, says local market analyst Bashir Yousef Kahlout.

Abdullah Al Taher, a Qatari lawyer and market expert, feels that Qatar Financial Markets Authority (QFMA) needs to get tough with violators. He says the market supervisory body must publish the details of its investigations into erring companies and their executives. The QFMA reports in the public domain do not explain the nature of trading violations, which is essential for investors and shareholders, he argues.

Market experts want QFMA to tighten its rules and put the details of erring companies and individuals in the public domain, explaining the nature of their offences and details about the punishment given.

Analysts say the market has been witnessing unprecedented volatility after the MSCI upgrade story hit it.

Another section of market experts argues that Qatar’s market potential is yet to be tapped efficiently. At least one-third of the listed companies’ shares do not trade on many days. Few companies hold regular meetings with analysts or even say in advance when their earnings results will be released.

 

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