Qatar’s stock market will have its first IPO in nearly three years, testing new laws intended to compete with more active exchanges in the area. IT services provider MEEZA might raise up to $249 million when it begins its IPO on January 15 by selling 50% of its shares under a new book-building process in Qatar that allows companies to propose a price range to test investor appetite. Qatar, the world’s top LNG exporter and host of FIFA World Cup 2022, is diversifying away from gas. This approach involves expanding its equity market and adding new listings.
Now that the World Cup has been successfully held, the attention is turning to other diversification sectors, said HSBC’s head of global banking in Qatar, Osama Ali. Since winning the bid to host the World Cup, Qatar has spent at least $229bn on infrastructure A lack of listings has produced pent-up demand for future flotation’s, and corporations are lined up. Barring global market instability, Qatari activity is projected to increase up in the first half of the year, Ali added, and six firms may go public in the following 18 months. The new rules Qatar has established over the previous three years have reduced the settlement time, where shares are transferred within two days of the deal. Qatar missed an IPO boom that swept Saudi Arabia and the UAE last year. Market sources explain the lack of deals to the coronavirus outbreak and the World Cup. Qatar is still an emerging market by MSCI. Doha’s exchange is dwarfed by Abu Dhabi’s $718.8bn and Riyadh’s $2.72trn.
We wouldn’t be shocked to see a robust pipeline of IPOs over the medium term, said Bassam Slim, a senior portfolio manager at Adventism Capital Management in Doha. HSBC’s Ali, who advises major players in Qatar, expects international investors to acquire shares in public offerings. “Book building is being tried with this IPO and will eventually be pushed out in a staggered way, first with local institutions and subsequently with overseas investors,” he says.