Qatar Financial Markets Authority (QFMA) has saidin its annual report that the Qatari capital market attracted foreign investments representing the foreigners’ net purchase of securities listed in the market, worth approximately QR 15.8 billion ($4.3 billion), and witnessed an increase in trading value by 42 percent compared to last year, where the trading value exceeded QR160 billion, compared to QR 112 billion in 2021.
This is stated in the annual report of QFMA for 2022, released today which includes the summary of its activity and performance during the past year.
The Board Chairman HE Sheikh Bandar Bin Mohammed Bin Saoud Al-Thani said in the report introductory message that it was able to provide new financial services to the Qatari capital market’s dealers aimed to stimulate dealings and increase their liquidity volume in the financial markets during 2022. Therefore, QFMA issued Securities’ Lending and Borrowing Rules, which allows the long-term investor to benefit from the owned securities by lending them, and also allows the borrower to benefit from price fluctuations in the markets, in addition to issuing Covered Short Selling Rules.
He added that in 2022, QFMA carried out a set of initiatives aimed at developing the institutional work and building the institutional capabilities of QFMA, as well as to advance it to serve as a model for financial regulator in a way that enhances its independence and maintains its position as a member of the International Organization of Securities Commissions (IOSCO).
HE Sheikh Bandar Bin Mohammed highlighted that QFMA exerts great efforts to maintain the investors’ confidence in the securities dealing system in the Qatari capital market, to protect participants dealing in such market, and to reduce risks may face their investments, especially under the economic crises and unrest facing the international financial markets, and in order to ensure market stability and maintain gains over the past ten years. He also confirmed that the importance of the Qatari capital market stems from its being one of the main pillars supporting the realization of Qatar National Vision (QNV 2030) and the growth and stability of the Qatari economy, due to the innovative and diversified financial instruments it provides, including equity instrument and low-cost debt instruments, and due to contribution to the diversity of funding sources and raising the economy’s ability to attract national or foreign investments.
For his part, CEO of QFMA Dr. Tamy bin Ahmad Al Binali said that, since inception, QFMA has been working to be an active actor in achieving Qatar National Vision 2030 and Qatar national development strategies, by advancing the Qatari capital markets to serve as a model for developed financial services to support the growth and diversity of the national economy. He added that QFMA exerts continuous efforts aimed at enhancing the Qatari capital market performance to match the global capital markets in terms of flexibility, high competitiveness and attractiveness for domestic and foreign investments, as well as the facilities, privileges and incentives provided to dealers and those looking to invest their money in a safe investment environment that protects their investments and provides them with high returns and guaranteed profits.
He also said that QFMA sets a number of strategic objectives at the top of its priorities that achieved excellence and flexibility in the Qatari capital market performance, which had great impact on enhancing the competitiveness of the national economy and sustainable financial stability as per the best international rules and standards, taking into account the Qatari market privacy and its dealers’ requirements.
Al Binali said that QFMA moving forward with confident steps towards the future for further development and qualitative shifts for the Qatari capital market sector, based on the country’s attractive business climate and a stimulating investment environment, and the strong and growing performance of the national economy lays its foundations year by year, in addition to the flexibility of the laws and legislations governing the QFMA’s work.
QFMA completed all phases of its second strategic plan by the end of 2022, and over the plan’s six-year schedule, it was able to achieve the total set objectives, which included many achievements whose positivity today reflects the level of development that the Qatari capital market has reached, which has become comparable in the quality of its services and performance, to its counterparts in the developed regional and global capital markets.
Despite the challenges that faced the implementation of the strategic plan, it succeeded in upgrading the capital market, moving its effectiveness and vitality to an advanced stage, and enhancing its role and support the national economy and the sustainable development in the State.
The annual report provided some governance statistics for 2021, the overall compliance percentage of all companies with the articles of the CG Code for 2021 reached 99 percent, with an increase of 9 percent over 2020 which was 90 percent.
During 2022, the Disciplinary Committee held (22) hearing sessions, registered (23) violations in the Committee’s record during the year, and (22) violations were adjudicated. The amount of violations was worth QR 29.95 million.
The total number of appeals and requests of a stay of QFMA proceedings considered by the Appeals Committee is (44), including (23) appeals and (21) requests of a stay of QFMA’s proceedings. The committee adjudicated on requests of a stay of QFMA’s proceedings and issued two rulings to adjudicate on two appeals.
The Appeals Committee held two meetings during the year, while the number of its sessions reached (4) sessions, each of which was preceded by a closed meeting for deliberation, with a total of (6) meetings.
During 2022, the QFMA received (72) applications, including (29) license renewal applications, and (43) new approval applications. QFMA also received (117) E-services applications in 2022. It included licensing financial services activities, licensing broker agent, licensing renewal of financial services activities, approval of individual in the regulated functions, licensing renewal of approved individual in the functions licensed by QFMA, registration renewal of external auditor, and registration renewal of financial evaluator.
2022 witnessed a remarkable activity in offering and listing, whereas applications were submitted to list one company in the second market, namely, Al Mahhar Holding Company, which operates in the field of petroleum services. Two direct listing applications were also submitted in the main market for each of Dukhan Bank (Banks & Financial Services sector) and Damaan Islamic Insurance Company “BEEMA. An offering application was submitted for MEEZA QSTP LLC (“MEEZA”), a leading provider of end-to-end IT services and it is the first company to be offered through the book-building mechanism in the State of Qatar.
QFMA added that work is underway with other companies that are in the process of completing applications for offering or listing their shares in both the main market and the second market. This comes as a tribute of the efforts made to advance the Qatari economy, which reflected positively on the investors’ confidence towards offering and listing shares of their companies.
2022 witnessed an acquisition of more than 2.6 QR billion, which is the first reverse acquisition in the Qatari market, as Investment Holding Group acquired the Elegancia Group by increasing the capital by about 2.6 QR billion.
The authority said it works on developing the financial market, providing innovative frameworks and facilitating the issuance of new financial products, by the efforts of New Financial Product Department including following up the key indicators of financial market performance, identifying deficiencies, considering weaknesses, submitting proposals for remediation, as well as following up legislative developments in the regional and international financial markets.
In terms of developing human capital, the annual report noted that the total number of the QFMA’s employees until the end of last year was 141, including 96 Qatari employees, representing 70 %.
On new projects, QFMA has completed studies for the establishment of one or more risk insurance funds, determining all the necessary data, including its objectives, management methodology, membership conditions, financial resources, asset management, operations mechanisms and liquidation, as well as comparing it to the experiences of similar funds in other countries, and work is still underway to study the feasibility of establishing such fund.
And in order to develop and strengthen the regulatory environment and reduce cyber risks on the technologies used in the financial market, the Risk Unit at QFMA will prepare a guidelines and work procedures, in addition to developing and issuing a guidelines of the standards and requirements for managing technological risks. The Risk Unit prepares the “Guideline for Risk Management” to ensure the effectiveness of the application of risk management procedures and policies by providing a clear methodology for identifying, classifying and evaluating risks, and collecting periodic risk registers of financial services companies for study, analysis and reporting thereon, with the aim of introducing senior management to the risks may face the companies of capital market sector.