10 qatari stocks join msci emerging market index

As many as 10 stocks, including market heavyweights Industries Qatar and QNB, have found place in the MSCI Emerging Market Index, after Qatar’s upgrade into emerging market status, effective from June 2.

Following the upgrade, Qatar will stand among BRICS (Brazil, Russia, India, China and South Africa), Malaysia, Turkey and Taiwan and it is expected that Qatar Stock Exchange will see as much as QR5bn foreign funds inflow.

Masraf Al Rayan, Barwa Real Estate, Commercial Bank, Doha Bank, Ooredoo, Qatar Electricity and Water, Qatar Islamic Bank and Vodafone Qatar are the other Qatari entities that have qualified to be included in the MSCI Emerging Market Index, which manages assets worth about $3.3trn.

Of the 10 stocks included in the MSCI EM index, 50% of them are from the banking sector, whose potential has a direct correlation with the economy.

Global index compiler MSCI had last year upgraded Qatar and the UAE to ‘emerging’ market from the ‘frontier’ status, after having maintained status-quo in their frontier status in the previous occasions.

The move to upgrade Qatar Stock Exchange into the emerging market from frontier status is expected to see foreign funds inflow of QR3bn-5bn, according to some projections.

Terming MSCI decision as a “positive” step, which would improve the performance of the stock market, QSE CEO Rashid bin Ali al-Mansoori said “this development would enhance liquidity in the market and contribute to the flow of medium-and long-term foreign investments.”

The graduation to emerging market will open the door to the flow of investments of global portfolios to invest in the shares of Qatari companies that will benefit directly from these investments.

This, in turn, will reflect positively on the various economic sectors in the country, especially in view of the fact that these foreign portfolios seek to invest in the Qatari market, which is characterised for being safe and stable investment environment, according to him.

The MSCI Market Classification framework consists of three criteria: economic development, size and liquidity as well as market accessibility. Msci world index bloomberg However, economic development is applicable only in the case of classification of developed markets.

In the run up to upgrade to emerging market, QSE witnessed stronger bullish momentum and its key index is now trading above the 13,000 mark, an all-time high.

“The upgrade is important because global investors will be looking at Qatar, whose economy will grow fast and boom. Msci developed markets It is also a stable economy,” Standard Chartered Bank Global Head Macro Research Marios Maratheftis had said.