Market experts have urged Qatar’s family business firms to go public and be part of the country’s vibrant mainstream market as the family businesses in the region, according to them, would face serious challenges in the next five to 10 years.
Speaking at the event “Growth opportunities, listing at Qatar Stock Exchange”, the market experts noted it is high time for Qatar’s family businesses to change their business model.
Going public will help family business firms to enhance the value of their companies and help effectively strategise their long-term growth plans, said Ahmed Hassan (pictured), Senior Business Development Officer, Qatar Stock Exchange (QSE).
Sharing his apprehensions over the family business group’s resilience to face the future challenges, Hassan noted that the entire responsibilities of huge family businesses are being shouldered by the first generation head of the family. They should think about restructuring their business model and ensure its is matching to the modern business culture, Hassan added.
The listing of companies can enhance the organisational efficiencies and will help improve decision-making of core business. It can also help optimizing financial status among banks, suppliers, creditors and overseas partners. The diversification of funding, away from reliance of founding shareholders and debt, will help uplift the valuation of the company.
One of the key pillars of Qatar National Vision 2030 is to increase the contribution of private sector to the national GDP. Strong private companies, joining the main market, will help accentuate the country’s growth pace, said another expert.
The companies that do not need funding or which are wary of regulatory concerns or dilution of shareholding are generally reluctant to go public. Companies may feel that they can continue to develop the business without change. But an IPO allows shareholders to diversify their funding sources. However, he cautioned- “an IPO could be a right option for shareholders, but being prepared is a critical factor in a successful IPO.” Evaluating an IPO should be a serious strategic option for Qatari companies looking to ensure their business is successful in the next one hundred years, not just the next ten years. On the regulatory concerns, he noted the regulatory environment in Qatar is going through significant change.
