Qatar Stock Market Wants to Increase Liquidity and Product Range

The Qatar Stock Exchange (QSE) completed its first-ever domestic securities lending and borrowing (SLB) transaction in May to increase market liquidity. As it aims to improve market and product sophistication, depth, and securities lending, the move represented a significant development for the QSE.

QNB Financial Services (QNBFS) served as the borrower, and HSBC served as custodian and agent-lender. The Qatar Financial Market Authority has licensed Edaa to provide several vital services related to securities and financial instruments. The QSE collaborated with Edaa on these projects.

Hussein Fakhreddine, CEO of Qatari investment bank QInvest, said, “The transaction marks a milestone under the Financial Strategic Plan, which is part of the Qatar National Vision 2030, allowing more sophisticated investment strategies and unlocking a significant liquidity pool.”

Maha Al Sulaiti, Acting CEO of QNBFS, says the company intends to provide this service to qualified investor clients who can profit from new trading strategies on the QSE that were not previously possible. It anticipates a corresponding increase in market volumes and liquidity when demand for these transactions rises.

QNBFS Chairman Adel Abdulaziz Khashabi said, “It’s important to note that SLB is one part of several key initiatives championed by the QSE to enhance the size and liquidity of Qatar’s equity market. Such initiatives include encouraging new listings via IPOs and direct listings, the most recent example being the successful listing of Techno Q on the Venture Market. We expect further IPOs and listings to stimulate demand and market activity. In the future, the introduction of a derivatives market should further stimulate market activity and bolster our appeal to institutional investors.”

In addition to seeking to expand, QInvest has matched its investment banking advisory services to Qatar’s 2030 financial sector vision. In addition to active mergers and acquisitions, Fakhreddine declared, “We are, and will continue to be, active in the securities market in the form of active mergers and acquisitions, as well as equity and debt capital market transactions.”

The Qatar Investment Authority has granted a permanent market-making program at the QSE QAR1 billion ($275 million). Fakhreddine said, “This program aims to enhance market liquidity, improve price discovery, and diversify capital markets, thus attracting more foreign investments and boosting investor confidence.” The next five years are allocated for the initiative.

Traders and investors will have access to more advanced investment strategies, hedging tools, and securities financing as SLB activities and other market initiatives grow. It is probably going to expand the pool of available investments and attract new investors to the Qatari market.