The QE maintained its position as the best performing market in the GCC and Arab region for the second consecutive year. The QE index grew by 1.12 percent in 2011 and was he only market in the Arab region with positive price return, underpinning the robustness of the Qatari stocks.

The QE 2011 annual report noted the year ended with the total market capitalization of over QR457bn, an increase of 1.59 percent adding over QR7bn to total market capitalization closed at QR450bn. At the world stage, Qatar ranked number 8th in terms of total return performance, including dividends, with a total return of about 5.6 percent.

The first two weeks of January saw QE index continue to grow that had commenced May 2010. By 16th January the index had reached a 2011 high of 9242.63. However, the social turmoil unfolded in Egypt in February led the index lower, hitting the year’s low at 7489.25 on 3rd March 2011. In the following 10 days the index rebounded sharply to 8457.12 and then gained a further 3.8 percent by the end of the year. Overall, in 2011 the index gained 1.12 percent, a stable year in comparison to other regional markets that lost value over the same period.

A sector-wise analysis showed Banking was the best performer in 2011, delivering 7.96 percent. Industrials, Insurance and Services were all down on the year. While the Industrials and Insurance were down by 1.51 percent and 7.06 percent respectively, the Services dropped 9 percent. Combined with 2010’s impressive year, QE Index has delivered 25.6 percent over the last two years.

In addition to the performance of the market, QE accomplished a range of important milestones during 2011. Clients from Qatar as well as across Europe, Asia and the US benefit from the resilience, liquidity and impressive growth of Qatar.

The extended trading hours and the reduced tick sizes have positively impacted liquidity while providing greater trading opportunity for investors.

“By adding half an hour in the morning and half an hour at the end of the trading session, the overlap with Asian and European markets has been enhanced. The network tick sizes have reduced the spreads in the orderbook and provided new liquidity”, Andre Went, CEO of QE, noted.

In line with its strategy to enhance the market infrastructure and post trade environment, the QE announced the successful implementation of DvP( delivery versus Payment) in order to enhance the efficiency of settlement process. This was positively received by investors as it enhanced the QE reputation for providing a safe and efficient market place allowing investors more confidence in the system and operations of the exchange. QE was the first exchange in there gin to offer full DvP settlement which adds to the eligibility for the upgrade to the MSCI.

The exchange has been engaging with its regulator to move forward with several different initiatives, including DMA (Direct Market access), SLB(Securities Lending and Borrowing), LP (Liquidity Provision) and Margin Trading. This is still in ‘work progress’. When adopted, these initiatives should provide even greater liquidity to QE and its investors, the QE annual report said.

QE’s listed short term T Bills will attract the attention of banks, financial institutions as well as investors. The presence of a bond market will encourage companies to issue and list bonds as another alternative for financing and ultimately contribute to increasing liquidity in the market. This underlines QE’s ability to list and trade different asset classes and diversifies the investment opportunities that it offers to all QE market participants.

“The trading of T-Bills was an important step to diversify investment tools while at the same time the Qatar Exchange has launched the new dividends distribution initiative through transferring dividends directly to the investors’ bank accounts, consequently paving the way for investors to easily collect their dividends and reinvest them in any of the successful and promising economy sectors”, said Dr Hussain Ali Al Abdulla, Acting Chairman of QE Board of Directors.