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Courtesy
of Ministry of Commerce & Economy
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H.E. Sheikh Mohammed Bin Ahmad
Bin Jassim Al-Thani,
Minister of Commerce & Economy.
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Irrational exuberance is a term with which many
Qatari’s are becoming familiar. The sobering
nature of the stock market has not dulled the enthusiasm
of most investors. Instead, it has helped create
a more knowledgeable and savvy investor class made
up of a solid majority of the Qatari populace.
Founded in 1997 as part of the Ministry of Economy
and Commerce, the Doha Securities Market (DSM) was
established primarily as a means to raise capital
for the government through the privatization of
state-owned entities. Then, rising natural gas prices
secured increasing returns into state coffers, diminishing
the government’s dependence on DSM for fresh
capital. Since then, most offerings on the DSM have
been less about raising government cash and more
about distributing wealth to ordinary Qataris.
As a result, a series of Initial Public Offerings
(IPOs) in which only Qatari citizens could participate
resulted in a vast trickle down of wealth. For the
first time, ordinary Qataris were given the chance
to hold a stake in their country’s economic
expansion and make a quick profit in the process.
Rules have remained heavily in favor of locals,
although foreign investors, particularly citizens
of neighboring Gulf Cooperation Council (GCC) countries
may now participate in the DSM. In January of this
year, DSM floated an IPO for what will be one of
the world’s largest Islamic banks. The resulting
frenzy found the hotels of Doha filled to capacity
with visiting investors from GCC neighbors, particularly
Saudi Arabia and Kuwait.
A visit to the downtown headquarters of the DSM
building illustrates that public awareness of the
market could not be higher. On any given day, Qataris
wait patiently in long lines to register for trading.
The IPOs and their swelling prices have created
a nation of shareholders.
H.E. Sheikh Mohammed Bin Ahmed Bin Jassim Al-Thani,
Minister of Economy and Commerce, said, "We’ve
implemented procedures to enhance transparency and
help increase the prompt flow of information for
the benefit of investors. We have also issued several
newsletters, periodical reports, yearbooks and biannual
books reflecting the financial positions of the
listed companies." Additionally, the Ministry
organized numerous meetings, conferences and symposia
on investing in the Qatari market, including discussions
on investment funds.
It’s important to keep in mind that because
it was established after the Asian financial crisis,
neither the DSM nor Qatari investors have ever seen
a financial market downturn. As a result, overall
investor sentiment is quite positive. A local Qatari
stockholder said, "Most of my shares are in
Qatar Petroleum. I bought them when they did their
IPO. I think it’s very safe to invest because
if Qatar Petroleum goes down, then say good-bye
to this country. But everyone knows Qatar Petroleum
is not going down. It is not going anywhere."
Qatar is in a unique position of strength in this
regard, as hydrocarbon extraction and sale is the
backbone of the Qatari economy. With demand for
Qatar’s natural resources expected to remain
high well into the future, investors remain confident
in DSM.
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Qatar
