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After allowing full foreign ownership in Qatar Stock Exchange, expectations of large investments

Qatar Stock Exchange

Economists has expected the proportion of investments in the Qatar Stock Exchange to increase after Doha’s decision to allow foreign investors to own up to 100% of the capital of listed companies.

Experts believe this step will raise investments in the Qatar Stock Exchange to more than one billion dollars within one year.

And at the end of last week, the Qatar Stock Exchange index rose 2.77% to exceed 10.89 thousand points after the decision.

Qatar Stock Exchange

During the session, more than 335 million shares were traded at a value of more than 1.28 billion riyals (about $350 million) due to the implementation of 20,647 deals in all sectors.

Shares of 18 companies rose, while the prices of 25 companies decreased, and 3 companies maintained their previous closing price.

Market capitalization jumped at the end of the trading session to more than 627 billion riyals, compared to the last trading session, which amounted to 619 billion.

Director of Investment at Aventecom Capital Management, Talal Al-Samhouri, said the amendment of the law regulating the investment of non-Qatari capital in economic activity will have a positive impact.

He added that the percentage of Qatari companies in emerging market indices will increase, and the Qatari market will also attract new investments.

The companies that will benefit most from the new decision are the companies whose ownership was not to a strategic investor, and other companies which strategic investors had an ownership less than 30%, Al-Samhouri added.

He expected foreign investments exceeding one billion dollars would flow into the Qatar Stock Exchange during the next few months.

High performance

In turn, financial analyst Ahmed Aql asserted that “allowing non-Qataris to own up to 100% of the listed companies’ capital will play in attracting more investments and strengthening the foreign investor, in a way that contributes to enhancing the performance and position of the market”.

He recalled how the decision to raise the percentage of foreign ownership from 25% to 49% two years ago affected the performance of the market and how the size of funds and investment portfolios increased.

In turn, legal advisor Muhannad Al-Ali says that Qatar “has made great strides in building a distinct legislative system capable of responding to global changes”.

He said the companies listed on the stock exchange “will directly benefit from the amendment of Article Seven of the Law”.

Al-Ali explained that before this decision, many Qatari companies worked to raise the percentage of non-Qatari ownership of their capital, foremost among which are Qatar National Bank and Qatar Islamic Bank.

Qatar Petroleum also announced, on March 20, 2018, to raise the limit on ownership by non-Qataris in energy sector companies and their subsidiaries listed on the stock exchange to 49%.  

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