Qatar FTSE upgrade may bring $1B windfall
The Korean Ambassador on a 2014 visit to the Qatar Stock Exchange. (Al Sharq)
Qatar Stock Exchange will see $1 billion of passive inflows following its upgrade to the Secondary Emerging Markets Index by FTSE Russel (FTSE), the global index provider, according to Arqaam Capital, a leading investment bank.
FTSE announced recently that Qatar will be promoted from Frontier to Secondary Emerging market status.
Jaap Meijer, managing director at Arqaam Capital, said: “We expect Qatar to have a weight of about 1.4 per cent in the FTSE all-emerging index, which is a combination of secondary and advanced emerging markets indexes, as our base case scenario. This weighting should result in passive flows of about $1 billion as roughly $70 billion currently passively tracks the FTSE Emerging Markets Index.”
Qatar will be removed from the Frontier index in September 2016. In recognition of the potential liquidity demands arising from its promotion, Qatar’s inclusion as a Secondary Emerging market status will be effected in two tranches.
The first tranche of 50 per cent will be implemented in conjunction with the semi-annual review of FTSE GEIS in September 2016 and the second 50 per cent tranche will be implemented in conjunction with the March 2017 semi-annual review.
FTSE Emerging Markets indices are part of the FTSE Global Equity Index Series (GEIS). The series includes large and mid-cap securities from advanced and secondary emerging markets, classified in accordance with FTSE's transparent Country Classification Review Process. The FTSE Emerging Index provides investors with a comprehensive means of measuring the performance of the most liquid companies in the emerging markets.
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