The newest emerging market in the Middle East
Qatar Exchange welcomed the decision of the Standard & Poors (S&P) Dow Jones to upgrade Qatar from a “frontier” to “emerging market”, describing it as a positive step that will attract further foreign investments to the Qatari stock market.
Qatar Exchange CEO Rashid bin Ali al-Mansoori expressed his satisfaction at upgrading Qatar to an emerging market, which he said “clearly and evidently reflects the recognition of the positive steps made by Qatar Exchange over the past years, in terms of the development of the market infrastructure and the implementation of a number of important projects and initiatives.”
“This upgrade will attract more international investors to the stock market, on the grounds that many international investors are interested in investment in the emerging markets as the upgrade reflects the compliance with the best international practices and standards”, he said.
In a statement issued by S&P Dow Jones, the upgrade of Qatar status reflects meeting the S&P Dow Jones requirements for inclusion in emerging markets, especially the degree of openness of the market to the international investment community and an established and well-tested operational framework.
According to S&P statement, the Qatari market has also met the quantitative requirements as defined for emerging markets as several large companies have increased their foreign ownership limits to encourage further foreign investment.
Qatar Exchange also introduced the DVP (Delivery Versus Payment) settlement system in 2011 and enhanced it twice in 2012 to ensure full protection of investors’ assets in case of rejection by the seller.
The other requirement as per the statement was the availability of securities lending and borrowing facilities, which have been launched at the Qatar Exchange and are currently available for use by liquidity providers as a mechanism to prevent settlement failures. The statement also highlighted the market participation in Qatar Exchange and viewed it as in line with the standards set by other emerging markets for its robustness and ease of entry into the market.
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