Wed, 07/05/2014 - 14:05
Qatar Exchange (QE), in collaboration with QNB Financial Services and Bank of America Merrill Lynch, has completed a two day roadshow in New York that aimed to support the further development and practice of QE’s listed companies’ investor relations.
It was the first leg of a week-long exercise which also includes London.
The forum is designed to complement the companies’ ongoing investor relations activities through providing an opportunity for the senior management of listed companies to meet key decision makers from a number of the world’s largest international fund managers.
The forthcoming inclusion of Qatar in the MSCI Emerging Market Index provided a unique opportunity for Qatar to showcase its listed companies.
Over the two days through a combination of one-to-one and group meetings the listed companies met with over 50 fund managers representing 43 major institutions. Those institutions represented the most important funds allocating money to Qatar, the GCC and the broader emerging markets. In aggregate the event hosted 140 meetings.
The delegation from Qatar was led by Rashid al Mansoori, CEO of Qatar Exchange, who delivered an introductory speech, in which he clarified why Qatar would be a distinctive investment destination: “Average compound growth of 8.5 per cent over the last three years and forecast real GDP growth of 6.8 per cent for 2014, accelerating to 7.8 per cent in 2016, as the implementation of large infrastructure projects picks up and the fast-growing population boost domestic demand. Large infrastructure projects, like the Lusail real estate development, the new Doha Port, the Hamad International Airport and the Doha Metro Rail Project will support growth going forward. This historic and future growth is higher than all our GCC counterparts (and our new peer group in the broader emerging markets). I would also venture there has been and will continue to be less cyclicality in the GDP growth story for Qatar than comparable markets a fact that should not be lost on you as fund managers."
Al-Mansoori added that the Qatar's fiscal stimulus would have positive influence on attracting foreign investment portfolios.
“Investment spending is expected to grow at compound rates of 7.5 per cent over the next five years with the Minister of Economy & Trade, HE Sheikh Ahmed bin Jassim Al Thani, recently saying that Qatar will invest around QR664bn on infrastructure projects, excluding projects in oil & gas sector, over this period. Critically, this spending is not dependent on external financing which should place Qatar at the front of the queue for portfolio investment into those companies likely to benefit from such spending."
Al-Mansoori stated that Qatar is prominent for financial stability, adding: "A combination of structural capital account and trade account surpluses provides a backdrop to the investment climate that cannot be matched in the region or emerging markets universe. The banking sector in particular, represented in the room by a number of our leading banks, is underpinned by low NPLs; loan to deposit ratios (104 per cent) and domestic savings rates which are collectively a unique selling point in their own right. Qatar’s international reserves rose to USD40.2 billion reflecting strong current account surplus and lower capital outflows."
"The Qatar GDP growth is only of use if it can be turned into future returns. We would argue that even amongst the expanded emerging markets universe (and not just the GCC) the combination of earnings growth, dividends and sound macro-economic underpinning will be hard to beat, especially in view of the fact that the Qatari market dividend yield of 3.9 per cent, Qatari corporates have strong balance sheets with low net gearing and a capacity to borrow which should be beneficial for ROE; and Qatari corporates have strong sustainable cashflows that support dividend payments," Al-Mansoori concluded.
Eleven listed corporates, representing blue-chip investment opportunities in the Qatari market used the opportunity to meet with fund managers. The Qatari companies participating were: Qatar National Bank, Doha Bank, Ooredoo, Industries Qatar, Mesaieed Petrochemical Company, Gulf International Services, Vodafone, United Development Company, Al Khaliji Commercial Bank, Qatar Electricity & Water and Milaha.
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