BNY Mellon official says new foreign investment likely if bourse wins emerging market status
Qatar would see at least $2 billion
in new foreign investment should it be upgraded from frontier
market to emerging market status by influential index compiler
MSCI in June, a BNY Mellon vice president said on Wednesday.
"Reports we've seen indicate Qatar would benefit from at
least $2 billion in new money from investors who track the MSCI
index," said Dubai-based Peter Gotke.
"You'd expect these indices to attach themselves very
quickly, with a significant amount of money coming in a very
short timeframe, possibly within six months or even three
months," Gotke said.
"And with PE ratios in Qatar relatively lower than in other
parts of the region, $2 billion itself could be a very
Though Qatar and the United Arab Emirates have been rebuffed
twice by MSCI for failing to raise foreign ownership limits and
switch to a new settlement system, Gotke said he believes both
have made significant advances toward that goal.
"Certainly Qatar, and to a certain extent UAE, have made
really good progress. The DvP (clearing system) is in place.
It's been pushed back a bit in UAE, which may or may not have
consequences," Gotke told reporters on the sidelines of an event
in the Qatari capital Doha.
"On the foreign ownership side, there are companies here in
Qatar that have managed to get permission to ramp up to 49
percent. That is indicative I think of a flexible situation."
"If the apparatus is that flexible, hopefully it'll resonate
with MSCI, but whether it will resonate enough I cannot say."
Though many see low volumes and regional unrest dampening
prospects for the two Gulf states, Qatar, if upgraded, would
move on the radar of an estimated $5-$6 trillion in assets under
management by institutions that track MSCI indices, he said.
With a soaring economy and gross domestic product expected
to grow 18 percent this year, Qatar's outlook is already among
the world's brightest.
"The appetite for Qatar is amazing. We're always asking
investors where they want to invest. Qatar in the last year or
so has been in the top three. It's a real area of interest,"
"One of the knock-on effects of an upgrade would include
more IPOs, more companies looking to grow not just locally, but
by attracting foreign investors.
"Qatar has been very active as a sovereign in London.
There's clearly a desire at the sovereign level, and that
quickly washes down to the corporates here to build portfolios
overseas."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.