Qatar is popping its consideration to diversifying its economic system away from fuel.
Qatar’s inventory market is ready to welcome its first preliminary public providing (IPO) in almost three years in a check of recent rules that Doha has launched, hoping to compete with extra energetic exchanges within the area.
IT companies agency MEEZA might elevate as much as 911 million riyals ($249m) when it launches its IPO on January 15 via the sale of fifty % of its shares underneath a brand new book-building course of in Qatar that permits corporations to supply a value vary to check investor urge for food and decide pricing.
Qatar, the world’s high LNG exporter and host of the FIFA World Cup 2022, is popping its consideration to diversifying its economic system away from fuel. That technique consists of constructing its equities market by opening it as much as a wider investor base and introducing extra listings.
“Now that the World Cup has been efficiently hosted, we will see the main focus is shifting to different diversification areas,” mentioned Osama Ali, HSBC’s head of world banking in Qatar.
In an try and emulate the dramatic transformation of Dubai and Abu Dhabi, Qatar has spent a minimum of $229bn on infrastructure since profitable the bid to host the World Cup.
The absence of listings has created pent-up demand for brand new flotations and corporations have realised this and are lining up. Barring volatility from international markets, exercise in Qatar is anticipated to choose up within the first half of the yr, Ali mentioned, including that as much as six corporations might go public via IPOs within the subsequent 18 months.
The brand new guidelines, which Qatar has launched during the last three years, have additionally shortened the settlement interval, the place possession of shares is transferred inside two days after the commerce is concluded.
Qatar missed an IPO growth that swept neighbouring Saudi Arabia and the United Arab Emirates final yr and market insiders attribute the dearth of offers in Qatar to the affect of the coronavirus pandemic and the concentrate on organising the World Cup.
Qatar remains to be categorised as an rising market by index benchmarker MSCI. With a market capitalisation of about $158.2bn, Doha’s trade is dwarfed in dimension by Abu Dhabi’s $718.8bn and Riyadh’s $2.72 trillion.
“The nation has ample enticing authorities and family-owned companies which can be ripe for being provided to the general public and we wouldn’t be shocked to see a wholesome pipeline of IPOs over the medium time period,” mentioned Bassam Slim, a senior portfolio supervisor at Aventicum Capital Administration in Doha.
HSBC’s Ali, who advises key stakeholders in Qatar, expects permitting international traders to purchase shares in public choices would be the subsequent step: “Bookbuilding is being examined out with this IPO and for my part will ultimately be rolled out in a phased method, initially with native establishments after which it could really be expanded to international traders.”
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