Qatar aims for futures trading, short-selling by end-2018

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DOHA, Oct 29, (RTRS): The Qatar Stock Exchange is looking to roll out futures trading and short-selling by the end of 2018, exchange CEO Rashid Ali Al-Mansoori said, part of a bid to boost liquidity and encourage more IPOs in the next year.

Qatar’s benchmark stock index has fallen about 18 percent since early June, when Saudi Arabia, United Arab Emirates (UAE), Bahrain and Egypt broke relations and transport ties, alleging that Doha financed terrorism. Doha denies this.

Institutional investors from these Gulf states appear to have dumped shares since the boycott, but the index has stabilised since then.

Al-Mansoori told Reuters in an interview that Qatar wanted to develop its financial markets despite the row.

He said the exchange was in the early stages of introducing futures and short-selling, which could start in late 2018, and market making that would boost liquidity was “awaiting final approval” from the regulator.

These tools could encourage IPO activity that has stalled, with just a single listing in the past three years, namely Investment Holding Group’s (IHG) $138 million offering of 60 percent of its share capital in August.

IHG was the first family business in Qatar to list its shares. The market is dominated by state-controlled firms.

“We don’t have enough IPOs … The IPOs are a market fuel and that’s what we are trying to promote with the stake holders,” said Al-Mansoori, adding that more than 10 family-owned firms were interested in offering shares in coming years.

He said IPO activity was expected to pick up in early 2018, with a medium-sized family-owned industrial firm poised to list in the first quarter and two larger family-owned retail firms expected within eight to 12 months.

Regarding the first IPO plan, he said the company was “ready and the document is with us but the decision (of when) is with them to decide. The timeline was this year, but we are waiting for the company to give us a new date.”

Two exchange traded funds (ETFs), one managed by Doha Bank and a second managed by Masraf Al Rayan, an Islamic bank, are finalising seed funding before being traded, potentially by the end of this year, said Al-Mansoori.

“This would be the first ETF (on the Qatar Exchange) and the first Islamic ETF in the region, and it could be the largest,” he said without giving the exact size.

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