The Qatar Exchange plans to expand beyond cash equities in the latest move by Qatar to diversify the economy of world's top liquefied natural gas exporter and challenge Dubai as the Gulf's financial hub.
Following an agreement earlier this month to sell a 20 percent stake to NYSE Euronext, the exchange aims to use the latter's trading technology to launch a swathe of products largely unavailable on its regional rivals.
"We will develop the Qatar market into a multi-asset class exchange, said a spokesman for Qatar Holding, owner of the remaining 80 percent stake in the Qatar Exchange and part of the Qatar Investment Authority (QIA).
"That will be shares, ETFs (exchange-traded funds), ETCs (exchange-traded commodities), bonds, sukuks and index products," the spokesman said, declining to be identified due to company policy.
The Qatar Exchange, one of eight bourses in the six-nation Gulf Co-operation Council, said earlier this month it was finalising the sale of a 20 percent stake for $200m to NYSE Euronext, operator of the New York Stock Exchange and bourses in Paris and other European centres.
"The purpose of the transaction is to build on the establishment and development of the Qatar Financial Centre," the spokesman said. "This is another building block that goes into ... allowing Qatar to diversify its economy."
Qatar has bought stakes in London Stock Exchange Plc and Barclays Plc and is eyeing deals with groups such as Germany's Porsche Automobil Holding SE to broaden its income streams.
Domestically, Qatar has created the $600m Qatar Science and Technology Park, plus an education city, in a drive to become a centre for innovation and research.
The Qatar Exchange will install NYSE's Universal Trading Platform, which is being rolled out across NYSE cash and derivatives markets globally, to launch Qatar's own derivatives exchange.
"Initial products will be based on market demand but would likely include single stock options and futures and index options," the spokesman said.
The bourse's focus on new products reflects the tough task it faces in catching regional rivals in terms of equity trading, despite Qatar's rising gas output enabling it to become one of the fastest growing economies in the world this year, according to a March Reuters poll.
Daily trading on Qatar's index averaged just 18 million shares over last three months, while volumes on the Dubai and Kuwait benchmarks were 598 million and 760 million respectively.
The Qatar Exchange is planning an initial public offering, the spokesman said, but he refused to comment on a likely timescale, the size of the stake to be sold or how much the company would look to raise.
The exchange will also look to go beyond primary equity listings. "Cross-listings may be something in the longer term that makes sense. The exchange is open to the idea, but will need time to test demand," the spokesman added.
"Initially, it could be more of a junior market model such as NYSE Alternext and, longer-term, potentially there could be cases where companies could apply for a secondary listing." (Reuters)For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.