11 May 2017
New York
Reporter: Drew Nicol

Securities lending is key for liquidity, says Qatar Stock Exchange CEO


The Qatar Stock Exchange highlighted the importance of a functioning stock loan facility to reinforce capital market liquidity during its two-day roadshow in New York.

Speaking at the event, Rashid Bin Ali Al-Mansoori, CEO of the Qatar Stock Exchange, explained that the need for access to securities lending and covered short selling had been impressed upon him by international investors present at the roadshow.

“Our inclusion in the various emerging markets indices continues to promote new inflows and the work Qatar is doing in terms of margin trading and liquidity provision (already available) and market-making, securities lending and borrowing and covered short selling will all assist in growing liquidity for all investors including the international investors we have met in the last few days,” Al-Mansoori said.

“Whilst liquidity in the secondary markets is a clear objective in terms of capital allocation objective we are also mindful of the Exchange’s position as a key to capital formation. Issuers are attracted to more liquid markets, since liquid markets reduce the cost of capital and lead to more accurate share price valuations.”

“The Qatar Stock Exchange thus value the increased attractiveness to issuers and investors, as this has a direct link increased confidence in the market overall and brings benefits to the whole economy.”

“Economies in broad terms benefit, because in part companies are able to access capital at a reasonable cost, subsequently increasing investment in their business and driving increased employment and their overall contribution to the economy.”

The event was organised in partnership with HSBC and Qatar-based broker QNB Financial Services.

The focus on promoting the country’s securities lending market is the latest in an ongoing initiative by the stock exchange to boost liquidity and encourage international investment in Qatar.

Qatar’s exchange first declared its aim to develop a stock loan service in 2013 when it pledged to adapt its delivery versus payment mechanism to support securities lending and borrowing.

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