On the Occasion of the Listing of Private Companies Event
May 8th, 2013, Doha, Qatar: H.E. Sheikh Hamad bin Jassim bin Jabr Al Thani, Prime Minister & Minister of Foreign Affairs encouraged private companies to take advantage of the IPO and listing at the Qatar Exchange in order to meet the present and future development challenges, especially in terms of the economic influence of such companies in a number of vital sectors in the State of Qatar; H.E. the Prime Minister also called for private initiatives to support and boost the private sector's role in the development process in order to become an active and influential partner in the economic and social development of the State of Qatar.
In a keynote speech addressed to the audience on the occasion of the "Listing of Private Companies: Supporting Qatar's National Vision" event, organized by the Qatar Exchange and held today at the Four Seasons hotel, H.E. the Prime Minister stated that at a time where the global economy is shifting to a new stage, there goes the growing need to combine all efforts to develop and ensure continuity of economic fundamentals to achieve success and prosperity.
H.E. the Prime Minister also underlined the benefits of incorporating the private companies in the stock market and to the great importance of the private sector in the success of the national economies and said in that respect: "we in Qatar attach great importance to the issue of developing the private companies and the private sector, in line with the Qatar National Vision 2030, which is inspired by the wise vision of both His Highness the Emir of our country Sheikh Hamad bin Khalifa Al Thani and His Highness the Crown Prince Tamim Bin Hamad Al Thani. We will therefore focus our efforts today on developing the relationship between the Government and the private sector from the perspective of the Qatar Vision 2030 and the National Development Strategy 2011-2016, that aims to achieve sustainable development and build a diversified economy."
H.E. Sheikh Hamad bin Jassim bin Jabr Al Thani added that: "It is our priority to develop the capacities of the Qatari citizens and increase their opportunities to enable them to build a prosperous society in a globalized world that is characterized by continuous change and competitiveness, and to develop a diversified and competitive national economy that is capable of meeting the needs of its citizens in the present and the future. You are all aware that the State has allocated a huge budget to spend on infrastructure, education, youth and health care projects. The total value of those projects is expected to reach about $200 billion over the next decade. Within this context, the private companies have an important role to play in the process of the economic growth by increasing production, diversifying the economy, creation of fixed capitals and developing real assets in the economy."
H.E. the Prime Minister also emphasized that the Government can assume its role in ensuring a favorable regulatory environment and adopting economic policies that are geared towards creating a climate conducive to the business sector, achieving the overall objectives and meeting the challenges of development.
He also added that Qatar's economy has gone through positive changes due to the developments in Qatar's national economy in expanding the contribution of non-oil sectors in the economy and its support for the process of diversity, and the clear and growing role of the private sector in increasing production and investment in those sectors, have taken place thanks to the policies and strategies implemented by the Government, that have focused primarily on the development of the private sector and on strengthening its role in the economic development.
H.E. Sheikh Hamad bin Jassim bin Jabr Al Thani added that: "The role of the private sector as one of the pillars of diversifying income sources has not thus far reached the desired level and much remains to be done to develop it. The responsibility for doing so rests with both the Government and the private sector."
H.E. the Prime Minister addressed the benefits of listing private companies in the stock market in light of the significant development that Qatar Exchange has gone through during the past few years, since its creation, at the technical and organizational levels, not to mention that the stock market is an important component of Qatar's national economic fabric, and such development provides shareholders with multiple investment options, especially since the market is in need for incorporating more companies in the coming period to keep pace with the rapid economic growth of the country.
H.E the Prime Minister stated that the creation of QE's Venture Market that targets small and medium enterprises is an essential step towards the advancement of an important sector such as the market of emerging companies, for it generates a strong motivation for emerging companies to look for a new source of funding by raising their capitals without having to face debt risks.
H.E the Prime Minister highlighted that the transformation from a family company into a shareholding company enhances the performance of the national economy and stated that "the importance of listing private companies and family-owned businesses stems from the economic heavy weight of those companies in a large number of vital sectors in the country. Turning family-owned businesses into public shareholding companies listed on the stock market increases the overall effectiveness of the economy, and has a positive impact on the local economy as a result of developing standards and controls for family-owned businesses, which represents a real added value to the national economy. Given the number of listed companies at the moment, we believe that their number does not reflect the size and position of the Qatari economy due to the fact that large influential economic entities still remain outside the market."
H.E the Prime Minister added that "the transformation of family businesses into public shareholding companies will offer the owners and the national economy many benefits, including the enhancement of GDP, especially when considering the size of the large capital invested in these companies and the revenues achieved every year. The increase in the number of the listed companies will have a significant positive impact on the economy in general."
At the conclusion of his speech, H.E Sheikh Hamad bin Jassim bin Jabr Al Thani called upon the Qatari private and family-owned companies to participate in the efforts to achieve sustainable development, in implementation of the Qatar National Vision, and emphasized on the importance of having concerted efforts with Qatar Exchange and all the parties responsible for the financial markets and the business community in Qatar in order to reach this vision.
Mr. Rashid bin Ali Al-Mansoori, CEO of Qatar Exchange, delivered a speech and pointed out that the forum is a kind of recognition of the important role of these companies and to face the challenges that may threaten their existence and continuation, and strengthen their ability to maintain growth and competitiveness on the local and regional levels.
In his speech, Mr. Al-Mansoori invited the private and family-owned companies to list on Qatar Exchange and reap the benefits of being listed and stated that "the transformation into a public shareholding company will help in gaining liquidity and increasing valuation." He added that "distributing the shares as a public company will offer liquidity and a valuation because public offering "monetizes" the value of the company at a market-driven price."
In this regard, Mr. Al-Mansoori pointed out that the other benefit that can be achieved after private companies become listed on Qatar Exchange is increasing the organizational efficiency and diversifying the funding options. He explained that raising capital through a share offering can reduce the risk of founding shareholders in growing the business by giving access to a wider investor base and in doing so supporting growth, investing in assets, expanding R&D or retiring debt.
Mr. Mansoori emphasizes on QE's readiness to provide all possible assistance to overcome the obstacles, concerns and fears that prevent private companies to switch to public shareholding companies. He also promised to provide all the solutions available that will make it easier for companies to list their shares in the stock exchange.
Talking about the listing benefits, Mr. Al-Mansoori stated that "it is worth mentioning that the transformation of family companies to listed companies has become a key element in the sustainability of their existence and legacy for several generations, especially in view of the fact that many studies have shown that many family companies have suffered declines after the second generation result of the distribution of inheritance and consequently the inability to grow and compete."
For his part, HE Sheikh Faisal bin Qassim Al Thani spoke about his experience in listing his company (Aamal Company) on Qatar Exchange in 2007. In this regard, he stated that "the decision to list the company on Qatar Exchange came after careful and deep study, which showed the benefits of being listed." He added that "the desire to ensure the continuity of the company's success was the motivation to transfer from a private company to a shareholding company listed on the stock market. Other reasons for the listing were the desire to broaden the base of shareholders and take advantage of various investment opportunities offered by the Qatari economy which is growing at a fast pace. "
HE Sheikh Faisal went on saying that "perhaps the reasons that prevent the companies' owners from listing are the difficult listing procedures and legal requirements, the fear of higher taxes and fees, compliance with accounting and regulatory requirements, and the fear of owners to lose control; nevertheless these concerns are not equivalent to the benefits, which can be gained by the company in the long term."
He concluded his speech by saying that "we have noticed that there are several Qatari companies, which were established and grown in previous decades, but completely disappeared from the economic arena. Thus the transformation of these companies and the development of their work mechanisms and management practices ensure the company's growth, sustainability and development in line with the development of the financial markets in which they operate."
The speeches, which were delivered in the forum, were followed a discussion panel, during which His Excellency Dr. Hussain Ali Al Abdulla, Chairman of the Qatar Exchange, answered some questions related to the listing of private companies in the stock market. He highlighted the government's support to the private sector. He also encouraged family businesses to switch to public shareholding companies listed on Qatar Exchange, pointing out the importance of having legislation and regulations that are flexible and suited to the business environment in Qatar so that companies are encouraged for the transformation.
Mr. Abdul Aziz Al Emadi, Listings Director of Qatar Exchange, delivered a speech in which he talked about the benefits that can obtained when private companies become listed on Qatar Exchange. He also highlighted some concerns, which may prevent from going forward with listing on Qatar Exchange as a s public shareholding company.
In his speech, Mr. Al Emadi discussed some concerns, which were addressed to the Listing Department when it approached several private and family companies in terms of the transformation into public shareholding companies. He indicated that despite the validity of some of the concerns, but the advantages of listing outweigh concerns and the result of listing will be for the best interest of companies' owners.
Mr. Al-Emadi concluded his speech by saying that "the introduction of new corporate governance processes is often seen as an obstacle but we believe the disciplines involved should also be seen as a way to improve the running of your businesses and therefore an increased contribution to Qatar's economic success. It is about establishing a framework of company processes and management thinking that adds value to the business, helps build brand / reputation and ensure its long-term success."
About Qatar Exchange:
Established in 1995, the Doha Securities Market (DSM) officially commenced operations in May 1997. Since then the Exchange has grown to become one of the leading stock markets in the GCC region and for two consecutive years (2010, 2011), was the best performing stock Exchange in the GCC. Following a strategic partnership agreement between Qatar Holding and NYSE Euronext in June 2009, the DSM was renamed the Qatar Exchange (QE). QE currently has 42 listed companies and its market capitalization is over QR457 billion (US$127 billion). The primary aim of QE is to support Qatar's economy by giving investors a platform through which they can trade fairly and efficiently. QE also provides the public with access to market information, ensures correct disclosure of information, and enforces securities regulations. QE is regulated by the Qatar Financial Markets Authority. For more information, please visit www.qe.com.qa
© Press Release 2013
