Qatar stock market is set to witness strong fund inflows in coming months which will further strengthen equity culture in the country. It is estimated that decision by some Qatar-listed companies’ to raise the cap of foreign ownership limits could attract an estimated QR7bn in passive funds into these listed companies.
The limit increases and fund-flows should support the QSE index through mid-2018, according to QNB Financial Services (QNBFS).
“We estimate that this will result in material inflows as part of the MSCI and FTSE rebalancing, which could drive QR7bn ($2bn) in passive funds into these QSE-listed names,” QNBFS analysts noted.
Its “Qatar Mid-Year Equity Strategy 2018” has noted that between January 1 and March 11 of this year, the QSE Index dropped marginally by 3 percent. However, from that point on, the picture changed materially as buying ahead of ex-dividend dates was further bolstered by positive news regarding potential/implemented foreign ownership limit increases to 49 percent for select QSE-listed equities.
QNB Group (QNBK) was the first to announce that it will propose an increase to the FOL to 49 percent at the company’s AGM, on March 12. In the following days, eight other companies announced plans to increase foreign ownership limits.
They included Industries Qatar, QIB, Qatar Electricity and Water, Barwa Real Estate, MPHC, QFLS, GISS, and International Islamic.
This led to a material rally in the Qatar All-Share Index driving it higher by 12 percent through May 1, while the aforementioned nine names increased by 16 percent over the same period.
In longer-term QNBFS remains optimistic on the Qatari equity market as fundamentals remain attractive.
The dynamism of Qatar’s is set to get stronger further as Qatar Stock Exchange (QSE) is in the process of listing several companies in the coming years. The bourse has prepared a list of 35 companies that are expected to be listed for the next five years.
Qatari stock market is based on a strong economy characterised by high growth rates and sustainable development. Baladna Food Industries is also preparing for an (Initial Public Offer) IPO to the Qatar Stock Exchange, which is eagerly awaited by the investors.
In a related development, Qatar Petroleum recently announced that it will be offering 49 percent of its shares in Qatalum for public offering, following the directives of the Amir H H Sheikh Tamim bin Hamad Al Thani to offer Qatari nationals shares in state-sponsored companies that enjoy safe investment environment and lucrative returns.
Country’s financial market is one of the best international markets and the largest market in the Middle East within the index of MSCI and it will continue to attract investors across the globe.
