With 50 listed companies and a market capitalisation expressed as part of the GDP at 65%, the Qatar Stock Exchange (QSE) has experienced significant growth in the last three years in terms of IPOs, reflecting the market’s increasing appeal to issuers and investors.

On Tuesday, the QSE launched a high-performing trading platform that aligns with the advanced financial market technologies utilised by the London Stock Exchange Group (LSEG). In an exclusive interview with Zawya, acting CEO Abdulaziz Nasser al-Emadi talks about QSE's road ahead, its IPO pipeline and the crucial role the stock exchange plays in developing Qatar’s economy.

How does the QSE’s current growth compare to that recorded over the last three years? 

In total, the QSE has seen five new listings within the last three years, showcasing a positive trend in its expansion.

Between 2021 and 2023, the QSE welcomed new listings with a total market cap of about QAR 21 billion ($5.75 billion), including QLM Life & Medical Insurance, Beema, Dukhan Bank, Mekdam, and Al Faleh Group. These additions broadened the range of sectors represented on the exchange and contributed to its diversification.

What is the QSE’s growth target for the upcoming years?

The QSE’s primary objective is to offer a platform for companies to raise capital and enable investors to trade securities. However, it is also essential to acknowledge that the lead time for offerings frequently spans years and involves various factors, including strategic and regulatory considerations. Despite these challenges, we remain optimistic that the QSE will continue to grow listings more meaningfully than we have seen in the last decade.

It is important to note that Qatar is actively implementing measures to diversify its economy and decrease its reliance on oil and gas exports. The QSE will play a vital role in this diversification by serving as a platform for privatisation initiatives and encouraging participation from small and medium-size enterprises (SMEs) and family-owned businesses.

To support this growth and meet the evolving needs of investors and companies, the QSE is continually enhancing its infrastructure and introducing innovative products and services.

How many more IPOs and listings can we expect this year besides Beema, Dukhan Bank and Meeza?

The outlook for the IPO/listings pipeline at the QSE looks positive.

We are presently examining five potential deals, but this does not necessarily mean that all five will materialise this year. The IPO market inherently involves long lead times and numerous dependencies. Therefore, while it might be tempting to predict outcomes in a straightforward manner, it's not necessarily an accurate reflection of how the process unfolds. We are also considering the listing of two ETFs, one in gold and the other in ESG.

Also, there are several potential issuers and products in various sectors that have expressed interest in listing in the next two years.

The QSE has also taken major steps to attract more listings in the venture market (QEVM) focusing on SMEs. We are currently partnering with Qatar Development Bank to provide financing programmes to SMEs looking to list on the QSE.

Overall, while the number of listings may vary from year to year, the outlook for the QSE’s IPO/listings pipeline remains optimistic, as interest from both companies and investors continues to grow.

What is the QSE’s role in Qatar’s economic growth?

The QSE continues to play a vital role in fostering Qatar’s economic growth as it supports the country’s diversification efforts and promotes investment.

The QSE advocates more transparency and disclosure by its listed companies through quarterly investor calls as well as roadshows in major financial centers of the world.

In addition, the QSE has an outreach program with international intermediaries and fund managers through which it engages directly with international clients and takes their feedback to shape the market development agenda at home.

The QSE attracted more foreign inflows in 2022 than the previous three years combined.

Although current world geopolitical circumstances keep global indices volatile, Qatar’s strong economic fundamentals and its economic growth work in its favor.

How are the QSE’s global partnerships shaping its growth?

The QSE’s global partnerships have significantly influenced its growth by increasing market visibility, enhancing market infrastructure, and sharing knowledge and expertise.

These partnerships have enabled the QSE to access new technologies and best practices that can be applied to improve its market infrastructure. 

For instance, the QSE worked with the London Stock Exchange Group (LSEG) to implement a new platform that plays a vital role in boosting market confidence and elevating the performance of available investment services and products.

The new platform features the deployment of a solution comprising Millennium Exchange and Millennium Surveillance aimed at enhancing the QSE’s overall equity markets infrastructure capabilities.

The QSE’s partnerships with other exchanges have allowed it to share knowledge and expertise with other markets. This exchange of ideas and best practices has helped the QSE to identify new opportunities for growth and development.

What are the different government and QSE initiatives that can significantly increase liquidity and depth in the market?

There are several: Some of these initiatives include reducing regulatory barriers to entry for new market participants and streamlining regulatory processes as well as the market-making system.

Recently, the Qatar Financial Markets Authority (QFMA), the regulator, approved acceptance of global IBAN accounts to enhance international accessibility.

The Qatar Investment Authority (QIA) has committed QAR 1 billion ($275 million) to the permanent market making program. The market makers, with their presence and active participation, help improve liquidity by consistently providing quotes, narrowing spreads, absorbing imbalances, and facilitating trading, in turn increasing the attractiveness of the market to other participants.  

Also, the QSE has been working to introduce new products, such as REITs, and to launch a derivatives market to diversify its product offerings and attract new investors. The launch of the derivatives market is planned for Q2 2024.

The exchange works closely with regulators and listed companies to enhance environmental, social, and governance (ESG) reporting in accordance with international best practices.

One of the most straightforward ways to increase liquidity in the market is by increasing the number of companies listed on the QSE’s Main Market and Venture Market. The QSE has been working to attract more companies to list, including SMEs.

Overall, these initiatives will help to increase liquidity and depth in the QSE.

(Reporting by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@lseg.com)