QATAR'S FIRST EXCHANGE-TRADED FUND MAKES STRONG QSE DEBUT

Publisher: Qatar Tribune

Date : MARCH 6, 2018

Satyendra Pathak
Doha

The QE Index ETF (QETF), the first exchange-traded fund (ETF) to be listed on Qatar Stock Exchange, received a huge response from investors on the first day of its trading on Sunday. The QETF, which is founded by Doha Bank and managed by Amwal, closed the first day of trading with traded volume of 60,885 and the traded value reaching QR5.4 million.

The debut of the QETF was above expectations as the market received it with welcoming volumes, Amwal Asset Management Head Talal F Samhouri told Qatar Tribune.

On the sidelines of the forum, Dr. R. Seetharaman CEO of Doha Bank gave insight on Qatar economy and Doha Bank ETF progress. He said “Qatar economy expected to grow by 3.4 percent in 2017. Qatar continues to follow its non- hydrocarbon diversification model and prudent fiscal management amidst low oil prices. In Qatar Budget 2017, the total allocation for key sectors such as health, education and infrastructure was nearly 44 percent of the total expenditure, out of which 12.3 percent is for health, 10.4 percent is for education and 21.2 percent is for infrastructure segment respectively. There is a clear focus on health, education and infrastructure development. In the infrastructure space, Qatar is currently witnessing mega infrastructure projects culminating towards the FIFA world cup in 2022, which is a jewel in the crown of Qatar. Qatar’s diversification has thereby contributed to sustainable development. The Qatar government is also taking steps to increase non-oil revenues, focusing on indirect taxes and levies. Qatar had come up with its $9bn bond issue in 2016. Qatar ranked 18th in ‘the Global Competitiveness Report 2016-17’ and stands second in the region. Qatar is also planning to introduce PPP law this year. The financial sector has a key role to play in achieving the Qatar National Vision 2030 owing to high level of capitalization and good capital adequacy ratios of banks. Measures taken by the Qatar central bank and the government have led to a robust growth in the financial industry, even during crisis. Qatar exchange has received MSCI upgrade in 2014 and more capital market reforms are pursed by Qatar economy. The upgrade enables better visibility of Qatar’s existing listed firms before foreign institutions. Qatar’s financial sector will be therefore be an enabler for Qatar’s economic transformation. Qatar Exchange is planning to introduce a number of products this year which will improve the investor’s participation. Qatar economy is sustainable on account of the economic and financial market reforms. Doha Bank will aim to support Qatar’s financial market reforms through the ETF.”

"We believe the trading will continue to be healthy as investors learn about the benefits of investing through ETFs," Talal said. The QETF, which opened for trading at QR89 per unit, closed at QR87.25 on the first day and saw a total number of 186 trades from investors seeking to capture exposure to top companies listed on the bourse. The ETF is designed to track the Qatar Exchange Index which screens for the top 20 listed companies in Qatar by market capitalisation and liquidity.

"We aim to make the QETF the vehicle of choice for investors who wish to gain exposure to Qatar. The local and regional investors have evolved from 'what is an ETF?' to now asking how this can benefit them as investors. This shows the evident awareness Amwal and its partners have put in educating the market participants as well as the investors," Talal said.

The ETF industry holds over $5 trillion in total assets under management. Since the decision to include Qatar to Emerging Market indices by MSCI and FTSE, there has been an increase in foreign funds invested in the market both actively and passively via index trackers.

Talal said the QETF, which has started trading with as initial open-ended capital of QR150 million, has got approval from the Qatar Central Bank to raise its capital up to QR10 billion.

Commenting on the launch, Amwal Chairperson Sheikha Hanadi Nasser bin Khalid al Thani said,"Qatar's inclusion in Emerging Market indices has increased its profile in the global investment community over the last four years and this reflects Qatar's outstanding growth on the global stage. Amwal took it upon itself to lead the innovation initiative by launching the QETF, which is designed for investors who wish to have a direct exposure to the Qatari markets while maintaining their rights for the dividend distributed by the underlying companies."

Amwal CEO Fahmi Alghussein said,"With the launch of the QETF, Amwal is ushering the evolution of investment products in Qatar in a variety of ways. Investors with an investment strategy that incorporates Qatari listed companies can now gain direct access to the market at one of the cheapest total expense ratios in Emerging Markets."

Talking to Qatar Tribune, Doha Bank Group CEO R Seethraman said the bank has plans to organise road shows in various countries to attract the attention of foreign investors to Qatar's maiden exchange-traded fund.

Seetharaman said the bank would look for possibilities to list QETF on stock exchanges of other countries as well.