Wasata Financial Securities to begin liquidity provisioning for newly listed Mekdam

Inma Holding Company on Thursday said its fully-owned brokerage arm Wasata Financial Securities will begin liquidity provisioning for the newly listed Mekdam Holding from October 3.

The (Mekdam) board authorised the chief executive officer to sign the contracts and agreements in this regard and to coordinate with all concerned parties to put the liquidity provision in service, its regulatory filing with the Qatar Stock Exchange (QSE) said.

Mekdam Holding Group, which last month got listed on the venture market for the small and medium enterprises, was established in March 2018 as a private company with limited liabilities and authorised and issued capital of QR50mn.

In May 2013, the Qatar Financial Market Authority had approved the liquidity provision scheme that can be carried out by the financial services firms.

The liquidity provision is an important development and one of the key components in the overall market development strategy of the QSE and liquidity providers would enable them to submit constant quotes for the sale or purchase of a particular security to increase its liquidity as per the controls and conditions set forth in the LP agreement.

A liquidity provider is an underwriter or a market maker that is a sizeable holder of a given security or that facilitates the trading of the security, providing greater price stability and distribution of the securities to both retail and institutional investors.

The liquidity providers guarantee transactions at the best price and boost the volume of transactions in the order book. Without their assistance, the number of transactions in the security could decrease and the ability of buy- and sell-side firms to accumulate or dispose of stock would be diminished.