Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.


Nick Wilson is Chairman of the London-listed Qatar Investment Fund Plc.

Nick Wilson
Nick Wilson

The Middle East consists of 17 countries spanning 3.5 million2 miles – for context that is over 15 times bigger than Britain and only slightly smaller than the EU. It still surprises me, therefore, that investors often assume that the region is economically homogenous, dominated by the hydrocarbons industry and inextricably dependent on the whim of the oil price.

Instability, both economic and political, of some of the Gulf Cooperation Council (GCC) member states is sometimes seen as indicative of instability in the region as a whole, but it is worth investors considering the unique characteristics of each market before jumping to conclusions. In fact, look past the headlines of low oil prices and the noise of emerging market volatility and you’ll see countries where growth is robust and valuations are increasingly attractive and accessible for the international investor.

Not all the countries in the region are wholly dependent on oil and some, such as Qatar, are actively diversifying, with the implementation of a long-term investment plan providing resilience to external economic shocks and commodity price fluctuations.

To begin, it is important not to overlook vast differences in how the economies are faring. Whilst the impact of low oil prices is not insignificant, the Qatar market has proved resilient compared to other GCC exchanges, falling only 9.2% in the 18 months to 31 December 2015, second only to Abu Dhabi (down 5.4%). By contrast, during this time, Saudi fell 27.3%, Dubai 20.1% and Oman and Kuwait 22.9% and 19.5%, respectively.

Source: Bloomberg
Source: Bloomberg

In fact, the Qatar Exchange is a pocket of continuing growth – for the first 9 months of 2015, profits of Qatari listed companies rose 6.4%. What is more, we would argue that Qatari equities have already priced in the rather excessive and contagious pessimism. As such, relative valuations remain extremely attractive, with the Qatari market trading at around a 14% discount to its historical ten year average.

Despite recent turmoil, Qatar’s economy continues to grow, with real GDP growth of 4.7% in 2015 and 6.4% expected in 2016 and beyond, as the country sees the results of a government plan to diversify the economy of the hydrocarbon rich country over the medium to long-term.

Qatar Stadium
Qatar Stadium

Many investors are surprised to hear that growth in the economy now comes from the non-hydrocarbon sector, which now constitutes more than 60% of GDP. The sector recorded growth of 7.8% in Q3 2015, driven by expansion in the construction, utilities and finance sectors, compared to a flat hydrocarbon sector and overall GDP growth of 3.8%. And this trend is set to continue for the foreseeable future – the non-hydrocarbon sector is expected to grow c.10% per annum between 2015 and 2017 (this compares to a marginal decline in hydrocarbon GDP).

Government spending on infrastructure of $240 billion is expected ahead of the FIFA World Cup 2022 – $182 billion in the next 5 years alone. While the World Cup was a catalyst and is a deadline for some of these developments, the government remains committed to the majority of infrastructure spending which is aimed at continuing long-term development and was planned or underway long before Qatar won the right to host the event.

This is encouraging not just for construction and related firms, but for financial services companies, through which revenue is recycled, as well as for the tourism, transport and leisure sectors.

What is more, the sophistication of Qatar’s stock market is developing rapidly as the country takes measures to encourage foreign investment domestically and improve access for international investors. In 2014, index provider MSCI upgraded Qatar from frontier to emerging status, in recognition that the liberalisation of the market was gathering pace. Last year, the Qatar Exchange (QE) also relaxed companies’ foreign ownership limits, recently increasing the limit from 25% to 49%. Furthermore, investors from elsewhere in the Gulf have been re-designated as non-foreign, further encouraging liquidity in Qatari shares, to the benefit of international investors.

More recently, in December 2015, the Qatar Exchange announced the introduction of margin trading, allowing investors to purchase securities partially financed by a loan from a margin trading lending.  This is expected to stimulate trading and liquidity by providing new financing channels for investors.

With the economy increasingly diversified, investment in Qatar is becoming an attractive option for those looking for exposure to a high-growth emerging market in the knowledge that, even if the oil price bounces back, future returns are not reliant on the commodities cycle – unlike many of its neighbours.