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After the World Cup, Qatar looks to revive its stock market | Business and Economy News


Qatar is turning its attention to diversifying its economy away from gas.

The Qatar stock market is set to welcome an initial public offering (IPO) after nearly three years to test new regulations that Doha has introduced, in the hope of competing with more active exchanges. more extreme in the region.

IT services company MEEZA is able to raise up to 911 million riyals ($249 million) at its IPO launch on January 15 through the sale of 50% of its shares under a new book-building process in Qatar, allows companies to set prices to test investor taste and determine pricing.

Qatar, the world’s leading LNG exporter and host of World Cup 2022, is turning its attention to diversifying the economy away from gas. That strategy includes building the stock market by opening it up to a broader investor base and introducing more listings.

“Now that the World Cup has been successfully held, we can see the focus shifting to other areas of diversification,” said Osama Ali, head of global banking at HSBC in Qatar.

In an effort to mimic the dramatic transformations of Dubai and Abu Dhabi, Qatar has spent at least $229 billion on infrastructure since winning the right to host the World Cup.

The lack of listings has created pent-up demand for new flotations and companies have recognized this and are lining up. In addition to volatility from the global market, activity in Qatar is expected to increase in the first half of this year, Ali said, adding that as many as six companies could go public via IPO in the next 18 months.

New rules that Qatar has introduced over the past three years have also shortened the settlement period, whereby share ownership is transferred within two days of the transaction being signed.

Qatar missed the IPO boom that swept neighboring Saudi Arabia and the United Arab Emirates last year, and market insiders attribute the scarcity of deals in Qatar to the impact of pandemic caused by corona virus and the focus on hosting the World Cup.

Qatar is still classified as an emerging market according to the MSCI benchmark index. With a market capitalization of around $158.2 billion, Doha’s exchange is smaller than Abu Dhabi’s $718.8 billion and Riyadh’s $2.72 trillion.

Bassam Slim, senior portfolio manager at Aventicum Capital Management in Doha.

HSBC’s Ali, who advises key stakeholders in Qatar, expects allowing foreign investors to buy shares in public offerings to be the next step: “Bookbinding is being tested. experience with this IPO and in my opinion it will eventually be rolled out in phases, initially with local institutions and then it can actually be extended to foreign investors. outside.”

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