Qatar does not appear to be in a hurry to ease foreign ownership limits in the listed companies, it is learnt.

“From what we understand, there is no urgency or pressing need (on the part of government to enhance the limits),” a market source said.

It is quite reasonable to assume that considering the liquidity pool in the country’s financial system and Qatar’s robust economic growth, he added.

Although it (easing of foreign ownership limits) would certainly be needed to enable the Qatari bourse to get into a higher tier in the MSCI Index classification, the benefits tend to be lopsided, according to a cross-section of financial experts.

The global index compiler had earlier this month maintained status-quo on Qatar Exchange’s “frontier” status citing stringent foreign ownership limits. The market expectations were that the bourse might be placed under “emerging” status.

Some financial analysts viewed that more global funds would inflow into Qatari bourse had its status been upgraded.

Various estimates put $ 2bn-$ 4bn funds inflow could be expected into Qatari bourse, in which NYSE Euronext has a 20% stake, had the bourse been put in the higher category.

While some others viewed that given the strong macroeconomic constructs of the country, such funds ought to flow into Qatar, in any case, considering that other markets have been remaining weak, struck by repeated waves of European crisis.

Particularly on (easing) foreign ownership limits, an analyst was of the view that it would largely benefit such stocks that are underlying to the natural resource-rich Qatar economy as he said “trading will (rather) be skewed.”

For the foreign funds, Qatar portfolio forms only a miniscule of its global universe, a market source said, adding even if allowed (higher foreign ownership limits), the investment will rather be limited to such stocks that have direct and indirect appeal to international markets.

“There are quite a handful of quality stocks, which have fairly strong regional investment appetite but may not figure in the international portfolio,” the source said.
Finance Minister HE Yousef Hussein Kamal had said in 2009 that several listed companies, including financial institutions, wanted to increase the foreigners’ shareholding limits to 49%.

In this regard, the market source reminded that shareholders of one of the market heavyweight companies had shot down the board proposal to increase the foreign ownership limit to 49% from 25%.

“For investors, whether foreign or otherwise, the story is loud and clear and that is the strong macroeconomic growth prospects in Qatar and the country’s lower exposure and hence risks to the European crisis,” the source said.