Thu, 05/06/2014 - 10:34
Rashid bin Ali Al-Mansoori, chief executive of Qatar Stock Exchange, spoke about the upgrade to emerging market status by both MSCI and S&P at the Annual Conference of the Arab Federation of Exchanges (AFE) in Dubai.
Al-Mansoori (pictured) talked about the efforts made to meet the requirements of the upgrade and the challenges faced by the Qatar Stock Exchange.
He also touched on the lessons learned and the underlying implications resulting from the upgrade such as the increase in market liquidity and other advantages that could be leveraged, such as in the development of investor relations and the promotion of the principles of corporate governance.
In his speech during the panel discussion, Al-Mansoori pointed out that the key criteria of the MSCI upgrade was the operational efficiency of the market measured against both qualitative and quantitative MSCI standards, especially the degree of openness of the market to the international investment community and an established and well-tested operational framework in line with international best practices.
"The journey of Qatar Stock Exchange to develop the market started almost seven years ago, when Qatar was put on the watch list for potential upgrade by MSCI in 2007. During the period from 2007 until issuing the upgrade decision in 2013, we have made the necessary improvements to the market regulations, trading and post trade procedures. We have also increased the number of brokers and custodians and introduced a DvP mechanism. The aim of all of these initiatives and improvements was to adopt those best practices required by the investment community," Al-Mansoori said.
"The upgrade of the Qatari market clearly and evidently reflected the recognition of the positive steps made by Qatar Stock Exchange over the past few years to meet the requirements of MSCI, in terms of the development of the market infrastructure and the implementation of a number of important projects and initiatives, which were welcomed by international financial and investment institutions.”
Speaking about the implications of the upgrade of the Qatari market status and inclusion in the MSCI Emerging Markets index, Al-Mansoori pointed out that the reclassification process highlighted a number of issues that had been addressed by the exchange and other competent authorities in order to raise the efficiency of the market.
“I would like to thank all of the investment community, including MSCI, for the issues they highlighted a number of issues during the reclassification exercise. While upgrade brings immediate benefits of increased liquidity, market depth and institutional investor participation, we have really achieved improvements in the operational efficiency of our markets,” he said.
"The road does not end here. We have a long way to go. With this in mind, we have identified a number of other areas that will allow us to capitalise on the emerging market classification. Initiatives like expansion of securities lending and borrowing, margin trading, omnibus accounts, risk management and the introduction of a CCP will add further confidence to the robustness of the market infrastructure.”
In his speech during the discussion panel, Al-Mansoori stressed the importance of educating investors, pointing out that Qatar Stock Exchange has been engaged for more than a year on the implementation of an ambitious programme to raise awareness of investing among the citizens and residents of the State of Qatar, through frequent workshops, seminars and courses. For the purpose of promoting the culture of securities investment, the QSE has signed an agreement with the Qatar Faculty of Islamic Studies at the University of Hamad Bin Khalifa to provide free training courses for private investors in Qatar on fundamental and technical analysis and methods.
Al-Mansoori also spoke about the importance of developing a programme for the listing of more companies in the Arab stock markets in order to provide new investment opportunities and called on the regulatory authorities and capital market commissions to respond to the needs of investors, markets and companies by accelerating the process of listing new eligible companies.
"It is important that we, the exchanges and regulators in the region, work together to address the issues related to market development and eliminate any impediments to the development of these markets. Above all, we will continue to work with our customers, that is the investors, issuers and intermediaries, to highlight any challenges and find solutions that will work for everyone’s benefit," Al-Mansoori said.
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