Qatar Stock Exchange: Total recovery from the pressures of the siege and the rise of a large share

Mohammed Benkasem - Al Jazeera Net

The performance of the Qatar Exchange since the imposition of a political and economic blockade on Doha, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt on 5 June 2017 has taken place in three main phases.

The Qatari stock market, which currently has a market capitalization of $ 160 billion, has moved from a difficult first year (2017) to a second year (2018), in which losses were reduced rapidly until it completely recovered from the consequences of the blockade and a third year (2019) ) In which the rising curve is dedicated and the page of siege is closed.

The Qatar Stock Exchange recovered as a result of internal decisions related mainly to raising the cap of foreign ownership of listed companies to 49%. The stock exchange management introduced a number of products and options to investors of all types. The external factors also had a clear impact on trading in the stock exchange. Global.

First year
The Qatar Exchange announced a week after the embargo began that it believed that some investors from Saudi, UAE and Bahraini institutions were selling in the Qatar stock market to push it down following the imposition of the blockade. Qatar Stock Exchange CEO Rashid Al Mansouri said that institutions in the countries of siege (Saudi Arabia, UAE and Bahrain) The strike deliberately targeted the Qatari market.

The result of the blockade was that the proportion of investors from GCC institutions in the Qatar Exchange declined.

In November 2017, the chief executive said that the market had overtaken the blockade and was now operating normally. The Qatari official said more than 100 new foreign funds had been launched in Qatar since the blockade.

However, the blockade affected Qatar's stock market, with its main index in November 2017 reaching its lowest level in five years.

According to the Qatar Stock Exchange's annual bulletin 2017, the stock index decreased by 1913 points, representing a decline of 18.3% compared to 2016. Total value of traded shares decreased by nearly 4% to SR 66.2 billion compared to SR 68.9 billion 2016.

Second Year
The year 2018 witnessed the complete recovery of the Qatar Stock Exchange from the effects of the blockade, thanks to a number of internal procedures and external factors. The most important actions announced were in March. Qatar Petroleum and the Qatar Industry, both major listed companies, The limit of ownership of its shares to non-Qataris from 25% to 49%, which added momentum to trading on the stock exchange.

On the 19th of the same month, the stock exchange listed Al Rayan Qatar Rolling Fund and follows the Qatar Islamic Exchange (QE) Index, which consists of listed Shariah-compliant Qatari companies. The Fund is the largest listed Islamic investment fund listed in one country, $ 120 million.

On March 5, 2018, Qatar Exchange announced the start of trading on the country's first listed index fund for Doha Bank and Amwal.

The stock exchange was the largest in the Gulf region. The Index Fund is designed to track the stock index, which tracks the top 20 listed companies in Qatar in terms of market capitalization and liquidity.

Investment funds play an important role in capital markets as a means of investing opportunities for small investors under the supervision of specialized entities, which may reduce their overall risk exposure.

One year after the embargo was imposed, Qatar Exchange stepped up, taking advantage of continued flows from funds to Qatari leadership stocks, after MSCI recently increased the weights of those shares.

The decision came after Qatar raised the ceiling of foreign ownership in the shares of major companies on the stock exchange from 25% to 49%.

In August 2018, the Qatar Exchange recovered from the effects of the blockade and closed at levels higher than in May 2017, before the blockade.

The Qatar Exchange's index on August 1, 2018 said that the index exceeded the figure of 4 June 2017, rising by 17% since the beginning of the year, leading all emerging and emerging markets in 2018. The Qatari market attracted net foreign investment Worth $ 1.45 billion.

In November 2018 Qatar Aluminum Industries (QAMCO) was floated on the Qatar Exchange, a subsidiary of Qatar Petroleum.

49% of QAMCO's shares were raised, while the parent company retained the remaining 51%.

According to the annual bulletin issued by the stock exchange, the number of shares traded in 2018 more than 2.2 billion shares worth 68.5 billion riyals, and ended the stock index in 2018, up 20.8% by 10 thousand and 299 points, up 1775 points compared to 2017.

Total value of shares traded rose 3.4% to Rls 68.5 billion in the same year. The market capitalization of listed companies increased by 24.7% to Rls 588 billion compared to Rls 472 billion at the end of 2017.

Third Year
The following year, the Qatar Stock Exchange's positive performance continued in 2018. According to the Statistical Bulletin of the Planning and Statistics Authority, the value of shares traded on the exchange moved from more than 6 billion riyals in April 2018 to 5.4 billion riyals in April 2019.

The overall index moved from 9112 points in April 2018 to 10377 in April of the following year.

In April 2019, Qatar Exchange received approval from the Ministry of Commerce and Industry for the initial public offering of Baladna, the largest dairy company in Qatar.

The IPO is expected to begin shortly, which has played a major role in the country's self-sufficiency in fresh milk and dairy products following the blockade.

In mid-May 2019, MSCI announced the addition of three listed companies to its emerging market indices in a move that will hopefully attract new foreign investments to the Qatari stock market, bringing the number of Qatari companies in the global index to 11 companies .

The listing would boost liquidity in the Qatari market and stimulate medium and long-term capital inflows and foreign investments, the chief executive of Qatar Exchange said.

One of the measures that helped to stimulate the Qatar Exchange in the past few weeks was the Qatar Central Securities Depository Company in May 2019 amending the percentage of ownership available to foreigners in the shares of a number of companies, up to 49% of the capital of those companies.

The companies included include Dlala, Al Mannai Complex, Qatar International Islamic Bank, Islamic Insurance, Qatar Islamic Bank, Qatari Manufacturing Company and Qatar Electricity & Water Company.

The Qatari stock market is poised for June 2019 to begin the stock split process and will reduce the nominal price of listed companies from SR10 to SR1 in an effort to attract individual investors, which will make the share price lower.

For example, the holder of Qatar National Bank (QNB), which reached SAR 195 on May 2, will be given 10 shares worth SAR 19.54 each.

On the other hand, the Qatar stock exchange has been negatively affected in the past few weeks, like other regional and global bourses, from concerns about the consequences of the US-China trade war on the global economy, as well as the political tensions between America and Iran.