QIA arm Qatar Holding buys NYSE Euronext out of QE

By Santhosh V Perumal

Business Reporter

NYSE Euronext has exited the Qatar Exchange (QE) with Qatar Holding acquiring the entire 12% stake held by the trans-Atlantic bourse, four years after it entered the fray with a $200mn investment.

Qatar Holding, the investment arm of the Qatar Investment Authority (QIA), has entered into an agreement with NYSE Euronext to purchase the 12% stake in the QE, thus becoming the sole owner of the Qatar bourse, which will find its place among the MSCI emerging markets by next year.

The decision by Qatar Holding comes in the wake of having achieved the strategic partnership objectives. However, QE chief executive Rashid bin Ali al-Mansoori said co-operation between the QE and NYSE Euronext will continue in different fields including technology and expertise.

The QIA and NYSE Euronext had signed a strategic partnership agreement in 2009, aiming to deploy a five-year strategy with the goal of transforming the QE into a world-class exchange. As per that agreement, NYSE Euronext held a 20% stake for $200mn, which was brought down to 12% with Qatar Holding having brought 8% holding earlier to take its stake to 88%, which now has become 100%.

“Over a period of more than four years of strategic partnership with NYSE Euronext, the QE has achieved significant progress and made remarkable achievements in terms of developing infrastructure and systems and the diversification of investment tools and services provided to investors,” said al-Mansoori, who last year took over as the CEO replacing Andre Went.

“Looking back, our strategic partnership with Qatar has benefited the Gulf region and customers on a global scale,” NYSE Euronext Group executive vice president (European equities and equity derivatives) Roland Bellegarde said, adding “with the development of the QE’s cash market and the launch of its venture market, most of our joint actions are now complete.”

Among the most important achievements was the MSCI upgrade of the Qatari market from ‘frontier’ to ‘emerging’ market status, al-Mansoori said.

The bourse reached another major milestone in its drive to develop a world-class financial centre in Doha with the introduction of the Universal Trading Platform based on NYSE Euronext’s existing best-of-breed systems and incorporating state-of-the-art technology in 2010.

“This launch marked an important step in the history of the Qatari market with the introduction of new order types, order parameters and a closing auction thus improving efficiency and transparency, and attracting a diverse investor base,” al-Mansoori said.

The period has witnessed various achievements such as the introduction of several mechanisms to assist investors, including delivery-versus-payment and liquidity provision schemes, he pointed out.

In addition, the QE launched an initiative to deposit dividends directly in the investors’ bank accounts and introduced a number of new investment tools such as bonds and treasury bills, as well as licensing several banks as custodians, launching various new indices, creating venture market dedicated to small and medium enterprises and allowing banks to perform financial service activities in the market.

“During the next phase, the QE will continue to achieve further progress and maintain a leading status among the region’s markets, taking advantage of what has been accomplished and seeking to provide more services to investors,” al-Mansoori said.

QFCRA proposes streamlining of share acquisition rules

The Qatar Financial Centre Regulatory Authority is proposing to streamline the process for acquiring stakes in financial companies, the authority said in a statement yesterday. Currently even small percentage movements in ownership have to be reported by firms in the financial zone to the authority, placing administrative and time burdens on companies.

The proposed changes would introduce four threshold bands, reducing the need to seek approval unless a shareholding moved from one band to another, the statement said. “This move would bring the rules into line with international best practice,” it added.

The authority opened a consultation period with firms until November 7; it did not say when a final decision on the proposed reforms would be made.

Institutional buying support lifts Qatar shares

By Santhosh V Perumal

Business Reporter

The Qatar Exchange, which yesterday effected a rebalance to its key indices, was back in positive turf mainly on institutions’ buying support.

Relatively stronger buying was seen in industrials counters as the 20-stock Qatar Index (based on price data) rose 0.21% to 9,628.30 points despite losers outnumbering gainers. But overall liquidity was on a decline in the market, which is up 15.19% year-to-date.

The banking sector witnessed significant slippage in volumes.

QNB, Industries Qatar, Gulf International Services and Nakilat saw their scrips shine; even as about 54% of the traded stocks ended in the red with major losers being United Development Company, Mazaya Qatar, Ezdan, Qatar Islamic Bank, Ooredoo, Milaha and Widam Food.

The 20-stock Total Return Index gained 0.21% to 13,756.63 points and the All Share Index (with wider constituents) by 0.22% to 2,423.75 points; while the Al Rayan Islamic Index fell 0.06% to 2,756.64 points.

All the three indices factored in dividend income as well.

Industrials stocks appreciated 0.97%, followed by banks and financial services (0.15%) and transport (0.11%); while telecoms shed 0.50%, consumer goods 0.48%, real estate 0.46% and insurance fell 0.07%.

Total market capitalisation was up 0.21%, or more than QR1bn, to QR525.46bn. Small and large cap equities were seen gaining; while micro and mid caps fell.

Foreign institutions were increasingly bullish as their net buying soared to QR12.76mn compared to QR1.39mn the previous day.

Domestic institutions turned bullish, amid lower exposure, as they were net buyers to the tune of QR14.56mn against net sellers of QR0.26mn on Monday.

Qatari individual investors’ profit-booking strengthened as their net selling surged to QR24.63mn compared to QR14.37mn the previous day.

Non-Qatari individuals turned profit-takers as they were net sellers to the extent of QR2.66mn against net buyers of QR13.46mn on Monday.

Total trading volume shrank 50% to 3.82mn stocks, value by 42% to QR164.17mn and transactions by 20% to 2,265.

The banking sector’s trading volume plummeted 83% to 0.93mn equities, value by 71% to QR55.65mn and deals by 54% to 581.

However, the insurance sector’s trading volume quadrupled to 0.12mn shares and value grew more than eight-fold to QR7.12mn on more than quadrupled transactions to 111.

The industrials sector witnessed a 56% surge in trading volume to 0.50mn stocks, 26% in value to QR42.32mn and 20% in deals to 580.

The market saw a 44% expansion in consumer goods sector’s trading volume to 0.36mn equities, 47% in value to QR16.79mn and 48% in transactions to 319.

The real estate sector’s trading volume gained 18% to 1.18mn shares and value by 8% to QR23.47mn while deals were down 10% to 341.

The telecom sector’s trading volume rose 9% to 0.25mn shares, while value plunged 44% to QR7.50mn and transactions by 49% to 142.

There was a 7% rise in transport sector’ trading volume to 0.47mn stocks and 13% in value to QR11.31mn whereas deals fell 2% to 191.

In the debt market, there was no trading of treasury bills and bonds.