FTSE confirms inclusion of 22 QSE entities in index

All the 22 stocks, which were earlier indicated, have now been confirmed in the global index compiler FTSE Russell's secondary emerging market index.

  
Image used for illustrative purpose. A trader watches an electronic share price display at the Doha Stock Exchange in downtown Doha March 19, 2015.

Image used for illustrative purpose. A trader watches an electronic share price display at the Doha Stock Exchange in downtown Doha March 19, 2015.

REUTERS/Mohammed Dabbous
03 September 2016
All the 22 stocks, which were earlier indicated, have now been confirmed in the global index compiler FTSE Russell's secondary emerging market index.

They are Aamal Company, Al Meera Consumer Goods Company, Barwa, Commercial Bank, Doha Bank, Ezdan Holding Group, Gulf International Services, Industries Qatar, Masraf Al Rayan, Medicare Group, Ooredoo, Qatar Electricity and Water, Nakilat, Qatar Insurance, QIIB, Qatar Islamic Bank, QNB, Milaha, Qatari Investors Group, Salam International Investment, United Development Company and Vodafone Qatar.

As many as 10 stocks were classified under largecaps and they are Barwa, Ezdan, Industries Qatar, Masraf Al Rayan, Ooredoo, Qatar Electricity and Water, Nakilat, Qatar Insurance, Qatar Islamic Bank and QNB.

Similarly, 10 equities were classified under midcap segments and they are Aamal Company, Al Meera, Commercial Bank, Doha Bank, Gulf International Services, QIIB, Milaha, Qatari Investors Group, United Development Company and Vodafone Qatar.

Medicare Group and Salam International Investment have been classified under the smallcap segment.

The first stage will take place as market open on September 19, whereupon all eligible Qatari equities will be added to the index at an initial 50% weighting, with the remaining 50% to be added in March 2017.

As per FTSE, Qatar, with high per capita income, comes under investment grade in creditworthiness and has sufficient broad market liquidity to support sizeable global investment and also has "reasonable and competitive" implicit and explicit transaction costs.

Moreover, Qatar's bourse, which follows T+3 settlement system, has sufficient competition in brokerage business to ensure high quality intermediary services. 

There has also been sufficient competition to ensure high quality custodian services in the Qatar Stock Exchange, which has "rare" incidence of failed trades.

Commenting on the FTSE Russell's confirmation regarding Aamal Company in secondary emerging market index; its chairman Sheikh Faisal bin Qassim al-Thani said it will be amongst the first wave of Qatari companies joining the index.

"We welcome Aamal's constituency of this index and the greater exposure it will bring to our story amongst international investors. We value active investor dialogue and engagement highly at Aamal, and we look forward to developing and refining our communications further as the company continues to grow and diversify," he said.

To be eligible for inclusion in the FTSE secondary emerging market index is a function of a company's market capitalisation, liquidity, free float and foreign ownership restrictions, an Aamal spokesman said.

Although the FTSE Russell confirmation is expected to prop up the QSE, much would depend on other factors also, especially the US Federal Reserve's decision on interest rates this month.

Historical data suggest that there had been knee-jerk reactions to the upgrade but they tend to be short-lived as the market assimilates the reality in the subsequent sessions.

© Gulf Times 2016


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