Gulf IPO market remained muted for months as trading on regional exchanges dwindled
Qatar's largest investment bank QInvest sees Islamic bond issuances continuing to gain momentum in 2011 while initial public offerings may also see some revival, the company's chief executive said.
Shahzad Shahbaz said the firm is working with potential issuers in Qatar who are looking to tap the Islamic bond, or sukuk, market in 2011 after Qatar Islamic Bank's oversubscribed $750 million sukuk demonstrated growing appetite and set a benchmark for other corporates to raise capital on favorable terms.
In an interview with Reuters, he said: "The market has stabilised and as long as liquidity is there and capital is available, issuers can tap the sukuk market with favorable pricing."
And he added: "We're looking at opportunities with some issuers to potentially bring them to market in 2011."
The market for initial public offerings may also see some revitalisation next year, he said, adding that the company is currently working on a few deals to bring private companies to the market in 2011.
He said: "This is an area that we see gradually picking up in 2011."
He also added: "There's a strong underlying story in Qatar and definitely an opportunity to bring some names to market."
Shahbaz said in October that QInvest would consider an IPO on Qatar's exchange next year.
The Gulf IPO market remained muted for months as trading on regional exchanges dwindled and volatility prevailed. Qatar's bourse, however, is the market leader, up 24 percent so far this year, dwarfing gains from other Gulf markets.
Following Qatar's winning bid for the 2022 World Cup, the Gulf Arab state is expected to reap the benefits of an infrastructure boom as it plans to spend more than $100 billion over the next five years on projects.
Shahbaz said the games will draw increasing interest both regionally and globally for Qatar, which will translate to more opportunities for investments and capital raising.
He said: "We are the leading and most well established bank in Qatar so we certainly see all these initiatives providing opportunity for us."
But the company is not looking solely within its borders.
QInvest has applied for a licence to operate in Saudi Arabia and aims to enter the kingdom in 2011. He said the company also plans to expand its operations into Turkey and the UAE.
While QInvest has an organic growth strategy, the company would consider acquisitions to fast-track its growth plans, he said.
To that end, QInvest, whose shareholders include Qatar Islamic Bank, acquired a 25 percent stake in Mumbai based Ambit Group in February. The two firms launched a sharia compliant fund in India earlier this month.
And last May, QInvest trumped two other bidders to buy a 44 percent stake in the UK's Panmure Gordon, investing $35.4m in the 130 year old stockbroking firm, which has since been pummelled by tough financial market conditions.
QInvest said it had no plans to change its stake.