Qatar Financial Centre (QFC), one of the world’s leading and fastest growing onshore business and financial centres, launched its landmark ‘Qatar Capital Market Report 2020,’ which highlights major capital market advances in Qatar, identifies how comparator markets have forged ahead on their developmental journeys and how QFC and its regulatory partners can build further on its successes to become a regional world-class financial hub.
The report, which was unveiled in an engaging webinar entitled, ‘Qatar’s Burgeoning Capital Markets’ as part of QFC’s #AccessQatar Webcast Series, provides a comprehensive review of the performance of Qatar’s capital markets over the past several years, indicating that the country is on the path to developing deeper and more diversified capital markets.
The ‘Qatar Capital Market Report 2020’ shows that Qatar is the region’s second-largest equity market with a market capitalisation of USD 160 billion from 47 listed companies by the end of 2019. The report goes on to indicate that that bond and sukuk issuance in Qatar reached USD 28 billion in 2019, largely driven by government issuance.
During the webinar, Fahmi Alghussein, CEO, Aventicum Capital Management (Qatar) and Andrew Wingfield, Partner, Simmons & Simmons (Qatar), discussed the report’s key recommendations for Qatar’s capital market development. The report recommends that a masterplan for Qatar’s capital markets should identify specific initiatives to encourage more primary market issuances, facilitate liquidity in secondary markets, establish a wider investment pool, and promote foreign investment through the enhancement of the relevant regulatory frameworks, market infrastructure, capacity building and incentivisation programmes.
It presents a prime opportunity for the government and regulators to push forward a cohesive agenda to further develop this segment in the country.
Henk Jan Hoogendoorn, Managing Director, Financial Sector Office at QFC
Commenting on the unveiling of the ‘Qatar Capital Market Report 2020,’ Thaddeus Malesa, Senior Advisor, Economics and Research at QFC, said: “We are delighted to release this report today that provides policy-makers and practitioners with a thorough overview of the developments in Qatar’s capital market. Most importantly, it lays out a clear pathway forward to build on the great strides that Qatar has taken in capital market development in the past to help facilitate commercial opportunities, empower domestic financial institutions to expand, help attract more international investors to the country’s growing equity market and continue to enhance the underlying regulatory frameworks.”
The report further highlights that Qatari regulators are on track to adopt a more comprehensive approach to develop its capital markets including potential new avenues for foreign investment. The USD 31 trillion ESG investment market presents Qatar with an opportunity to establish a niche in the region that will further elevate the country’s capital markets and give the country an absolute regional competitive advantage.
Henk Jan Hoogendoorn, Managing Director, Financial Sector Office at QFC, said:
“Sustainable investment is fast growing in the GCC and MENA regions and with Qatar’s market largely untapped, it presents a prime opportunity for the government and regulators to push forward a cohesive agenda to further develop this segment in the country. Qatar establishing itself as a destination for sustainable investments will attract both issuers and investors to its capital markets, which will eventually be a big win for the entire financial sector in the country. Gladly, QFC is already at the forefront of this agenda.”
Hoogendoorn added: “Qatar has effectively started to do the groundwork. The mandatory ESG reporting requirement for listed companies in Qatar Stock Exchange serves as a stepping stone for sustainable investments to be widely introduced. Qatar does not need to reinvent the wheel to keep ahead of the curve, but the regulators need to strategically and quickly leverage the ample potential for capital markets development in Qatar by incorporating sustainable investment to the market.”
The recommendations put forward in the report also place special emphasis on attracting foreign investors and institutions to enhance Qatar Stock Exchange (QSE) capabilities through Fintech, as the rapid development of Fintech in Qatar is promising to enable the QSE to facilitate retail investment in securities, in addition to the introduction of lower investment limits.
Additionally, building on the QFC’s successful passporting initiative with the Turkey Presidency Finance Office, which has been a successful cross-border endeavor for the past few years, the report goes on to state the importance of cross-border agreements, partnerships, passporting, and cross-listing to effective capital market development in the future.