(MENAFN- The Peninsula) Boosting market liquidity is one of the key elements of Qatar Exchange's (QE) strategy to create value, Rashid Bin Ali Al Mansoori, CEO of QE, said here yesterday.
Speaking at the MEED Qatar Projects conference, Al Mansoori said Qatar Exchange has come a long way ever since it launched in 1997. The average daily trading volume jumped from QR300m during the last 10 years to QR900m during 2014. The huge jump in the trading volume is because of the QE's strategic plans to increase liquidity in the market, he said.
"We recognise that developing liquidity in the market is important and we continue to develop and introduce initiatives to further enhance the market. The upgrade to emerging market status by both MSCI and Standard &Poor's, has led to significant increases in trading activity and market depth".
As a means of improving the breadth of the market, and to further improve liquidity, Al Mansoori noted that the QE continues to promote the bourse as an attractive venue for new listings.
Al Mansoori said the local bourse is currently working on to launch a number of ETFs which will provide access to emerging market debt and equities. "We are also panning the introduction of ETFs that will allow investors to invest in all of the components of the QSE 20 index with a single trade"
Shariah-compliant products are also part of our product diversification strategy. We are currently working with a local asset manager to launch the largest Shariah-compliant ETF in the world. In addition to ETFs, we are also working with the regulators to list real estate investment funds (REITs) as we recognize that real estate is integral part of many investment portfolios in the region. These products will significantly add to the size of the market and allow us to attract new investors, further enhancing liquidity.
"We continue to develop and implement initiatives, in particular the liquidity provision regime, which have contributed to significant improvements in liquidity for certain stocks. The Group Securities and Mannai Corporation entered into an LP agreement last year, which has resulted in a tenfold increase in average turnover of Mannai stock. This is particularly significant because Mannai is not one of the companies included in the MSCI Emerging Markets index and yet with this LP arrangement in place has been able to attract significant liquidity. We are expecting a number of similar deals with other listed companies to be announced soon."
Al Mansoori noted: "Currently, securities lending and borrowing is allowed only for delivery versus payment (DVP) processing and liquidity provision. We are working with the regulators to further expand availability to professional investors, allowing them to gain additional income through lending their shares. This will also result in an increase in the market free float and provide additional trading opportunities for licensed investors".
With the introduction of Margin trading, investors will be given the opportunity to increase the size and scope of their portfolios without having to tie up more of their capital. This will also improve market liquidity. Our product diversification strategy is simple; list products that provide access to markets outside Qatar and allow easier access to a broader range of asset classes within Qatar.
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