Rashid Al Mansoori became chief executive of the Qatar Stock Exchange (QSE) in 2011 after a four-year stint with Qatar Investment Authority.
Under his leadership, and in partnership with the international exchange operator NYSE Euronext, the QSE has become one of the leading exchanges in the region, with a current total market capitalisation of US$175 billion.
Last year, along with the UAE exchanges, the QSE was upgraded to emerging market status by the index provider MSCI and by the ratings agency Standard & Poor’s. He answered questions from The National via email.
What difference has the upgrade by MSCI made to QSE?
The MSCI and S&P upgrades were the result of many years of coordination and planning and were part of QSE’s long-term development strategy. Qatar had invested many years in market/infrastructure changes to reach that point so the upgrade should not be looked at as the “start” of anything. However, specifically, the market estimates there has been an incremental inflow of over US$1.5 billion as a result, which was clearly beneficial for index performance and liquidity, both of which have performed strongly.
Over and above the numbers, the upgrades also highlighted the ongoing strengths of the macro story for Qatar and the benefits of investing in Qatar via our listed companies. The listed companies themselves have seen an increase in investor interest and a consequent increase in investor scrutiny, which we think is beneficial to the market overall as we all strive to meet the increased demands that this attention brings.
It is worth noting that the index upgrades were only a part of the plans for developing the QSE.
What are the QSE’s plans for growth?
QSE’s strategic objectives revolve around capital formation and capital allocation. We continue to seek growth through both of these areas. On the capital formation front we presently have 43 listed companies. While this in terms of market cap as a percentage of GDP is broadly in line with most emerging markets, we are always seeking more listed companies, and at any time have ongoing discussions in both the private and public sector.
We have been very focused on educating the market as to the benefits for going public; one way to be champions, for 100 years, not just in the next 10 years, is to be a listed company with executive management and owners who work together to ensure the long-term success of the business.
On the capital allocation side we have a series of initiatives which, subject to regulatory approval, will benefit the market overall including product diversification, and on the infrastructure side margin trading and covered short selling, in addition to the already announced liquidity provision measures.
Are you satisfied with levels of disclosure, transparency and governance for Qatar quoted companies?
We are very aware that the competition for capital is increasing across all markets, including Qatar, and our companies need to continually develop in all these areas. We are equally aware that this is a process that takes time, energy and resources both on the part of the exchange and the companies. We wholeheartedly support and encourage the efforts of our listed companies in this important area.
How important is investor relations (IR) to QSE?
Our listed companies are in the global spotlight every day as “champions” of Qatar – we therefore naturally view IR as a key element to the Qatar story.
We have been working with all our listed companies for a number of years now on the area of investor relations and we believe this is bearing fruit. We have in the last month announced the Excellence in Investor Relations programme, which we see as another part of this ongoing process. In launching the region’s first exchange-driven recognition system we were looking to build on the work we have already been doing with our listed companies in fortifying investor confidence in Qatar’s overall market, inspiring excellence in investor relations in Qatari companies and setting new benchmarks in the area of investor relations in the region.
Do you think Arabian Gulf exchanges can cooperate more? Or are they in competition with each other?
Through, for example, the Arab Federation of Exchanges and World Federation of Exchanges, in which Qatar is a board member, QSE is heavily involved in regional and worldwide cooperation. As relatively young exchanges, regional bourses are able to learn from the experiences and mistakes of others, as well as incorporating best practice in a way that best suits regional and local markets.
The GCC/Mena region remains an area where exchanges are viewed as national “champions” so there has been to date more cooperation than direct competition. But I think we all do understand that we are in competition for finite amounts of capital, and this brings us nicely back to our ongoing focus on IR for our listed companies. They need to be able to differentiate their investment stories and at the same time seek to adhere to global standards of transparency and corporate governance.
What do you think will be the impact on Qatar of the Saudi market opening up to foreign investment?
The opening of the Saudi market will be important for the whole region and not just Qatar. However, we continue to believe Qatar has a compelling macro story with a strong investment story underpinned by financial stability, strong cash flows and robust dividends as well as the necessary infrastructure. We welcome the increased interest in the region medium-term that the opening of the Saudi market will accelerate.
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