Qatar MSCI Emerging Market Upgrade

RNS Number : 9042G

Qatar Investment Fund PLC

12 June 2013

 



Wednesday 12 June 2013

Qatar moves from Frontier Market to Emerging Market

MSCI upgrades Qatar and UAE to Emerging Market status

London: 12 June 2013 - Yesterday, MSCI upgraded the Qatar and UAE markets to 'Emerging Market' status from 'Frontier Market'. The change is expected to be effective by May 2014.

Despite Qatar's very high GDP per capita and government budget surplus Qatar has until now been categorized as a frontier market by MSCI because of limits on foreign ownership of Qatari companies.  International investors and foreign funds have been interested in exploring opportunities arising from the planned infrastructure spending in Qatar. However, they were constrained by the low foreign ownership limits (FOL) limits for domestic companies.  In the recent past, regulators in both Qatar and the UAE have made efforts to address the FOL issue.

Regulators in Qatar have encouraged several companies listed on the Qatar Exchange to increase FOL.  Doha Bank recently raised its FOL to 25%, while The Commercial Bank of Qatar and Qatar Islamic Bank have applied for an increase. Further, several companies listed on the Qatar Exchange have requested the regulator to modify the calculation method of their FOL and use companies' total market capitalization instead of the free float market capitalization. The move is expected to increase the shares available to foreign investors.

Nick Wilson, Chairman of London-listed Qatar Investment Fund plc, said:

"The upgrade to 'Emerging Market' reflects Qatar's powerful economic, regulatory and financial progress in recent years.  It also confirms that business conditions and the regulatory environment are increasingly investor friendly in Qatar and the UAE, and should provide a significant impetus to both these markets. These markets offer an attractive combination of a stable economy, strong earnings growth, low valuations and high dividend yield, providing a compelling investment opportunity to global investors. 

"According to an HSBC report last month, the upgrade to "Emerging Market" status for these nations may lead to additional fund inflows of up to $430 million into Qatar and over $370 million into the UAE.  The Qatar Investment Fund plc, listed in London, offers international investors a practical way to get exposure to Qatar's rapidly developing economy."

In Qatar, the broad macroeconomic story remains strong, backed by massive infrastructure spending ahead of the FIFA 2022 World Cup. Going forward, the construction, banking and consumer sectors are likely to be the key beneficiaries. Hence, the fund's investment adviser favours selected domestic banks and real estate sector companies.

The UAE is witnessing a recovery in the property market and economic growth in the nation is stabilizing. The real estate sector in Dubai reported a growth of around 10% in 2012 after it bottomed out in 2008. Going forward, growth is expected to accelerate further. Qatar Investment Fund believes that domestic banks and real estate companies in UAE should be the key beneficiaries of this recovery.

The MSCI Emerging Market index is one of the most widely used index by institutional investors and funds addressing the developing markets and the inclusion of the Qatar and UAE to the MSCI EM index would enable these markets to attract additional fund inflows.

ENDS

For further information:

For further information please contact:

Nick Wilson

Chairman

Qatar Investment Fund plc

01624 622 851

William Clutterbuck or Robbie Hynes

Maitland

0207 379 5151

 

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