Doha Securities Market (DSM) was established in accordance with the Decree Law
(14) for the year 1995. The Market started its activities on the 26th of May
1997 and following the implementation of a Central Securities Registration
System in August 1998; electronic trading was started from March 11, 2002.
April 3, 2005, a law was issued amending some provisions of Law No (13) of the
Year 2000 regulating the foreign investment in economic activities. The
amendment allows non-Qatari’s to invest in all companies listed at the DSM at
a rate not exceeding 25% of the traded shares. On September 14, 2005, Law No
(33) for the Year 2002 was issued relevant to the establishment of Qatar
Financial Markets Authority (QFMA) and the Doha Securities Market Company (DSMC).
QFMA is an independent and empowered regulatory and supervisory authority for
the capital markets in Qatar.
The Government of
Qatar opened the official stock exchange at Doha only on May 26, 1997. There are
17 companies listed on the Doha Securities Market (DSM). The market is expected
to mobilize private funds for investment in the privatization projects and
projects in the manufacturing, banking, trade and services sectors thereby
spreading the economic benefit of industries to the people and help in
diversifying the oil-dependent country. The Market is also expected to help
local family-owned businesses to expand and spread their business risk.
trading takes place between 10.00 am to 12.30 pm between Sunday and Thursday.
regulations require a company to have at least 30 shareholders and a minimum
paid-up capital of QR 40 million. At least 50% of the nominal value of shares
must be fully paid up.
Doha Securities Market witnessed an unprecedented boom particularly since 2004
following an average annual GDP growth of 15.8% during 1999-2003 based on
current prices. The GDP increased
by 20% in 2004 and reached QR 103.56 billion at current prices and further by
33.8%, 24.2% and 25.1% during 2005, 2006 and 2007. We expect the GDP at current
prices will touch QR 322.5 billion.
of Listed Companies and Market Capitalization
account of large scale development activities and the booming economy, the Doha
Securities Market also witnessed increase in number of listed companies and
record appreciation in share prices over the last few years. Number of listed
companies increased from 13 in 2003 to 43 by the second half of 2008. Market
capitalization also increased from US$ 26.7 billion in 2003 to US$ 135.7 billion
by the second half of 2008.
Volume and Price Appreciation
addition to an increasing number of listed companies, the market also witnessed
sharp increase in trading volume and strong price appreciation. Trading volume
increased from US$ 3.21 billion in 2003 to US$ 28.01 billion in 2005. During
2006, trading volume declined to US$ 20.58 billion but improved again to US$
29.91 billion in 2007. During the first half of 2008 trading volume was US$
28.21 billion. Share prices also appreciated substantially since 2003
until 2005. The Doha Securities Market 20 Index appreciated by 69.8% in 2003,
64.6% in 2004 and 70.2% in 2005. The market recorded a decline of 35.5% in 2006
but again appreciated by 34.3% in 2007 and 23.8% by the second half of 2008.
the fastest growing market among the Gulf countries, Doha Securities Market was
a place of high speculation and volatility. During the past five years, average
daily volatility remained around 2.4%. During January 2008, we witnessed a daily
volatility of 2.4% and intra-month variations of 34.92% and subsequently, until
August the daily volatility and intra-month variations remained in the range of
0.7% and 13.23% (July) and 1.3% and 27%(April). However, on account of the
uncertainties caused by the credit crisis and the onset of recession the Doha
Securities Market like its other counterparts became highly volatile
subsequently. During September and October, daily volatility increased to 3.7%
and 5.2%, while intra-month variations increased to 60.6% and 83.5%, over the
Current Valuation Levels
and Future Outlook
DSM 20 Index declined by 31% till October 21, 2008 to touch a low of 8,185.68
points from its June close of 11,863 points, partly on account of panic and
negative sentiments created by the current global credit crisis, falling oil
prices and looming economic recession in most of the developed countries.
economic development has moved at a fast pace on the backdrop of its oil and gas
resources. Proved oil reserves of 15 billion barrels (588,000,000 m³) should
ensure continued output at current levels for 23 years. Oil has given Qatar a
per capita GDP that ranks among the highest in the world. Qatar's proved
reserves of natural gas exceed 7000 km³, more than 5% of the world’s total,
third largest in the world. In the recent past a number of upstream and
downstream projects were implemented which added some diversification to its
economy in terms of new ancillary and other industrial projects. However, the
economy is still primarily dependent on petroleum resources. Petroleum is the
cornerstone of Qatar's economy and accounts for more than 70% of total
government revenue, more than 60% of gross domestic product, and roughly 85% of
its export earnings. Production and export of natural gas are becoming
increasingly important. Long-term goals feature the development of off-shore
petroleum and the diversification of the economy.
expect the Qatari Government to spend heavily on physical and social
infrastructure in the coming years and gradually move ahead in the path of
privatization which will further diversify the economy and bring in more
companies into the listed companies domain.
valuation levels are
quite attractive at the current price levels and positions can be taken on
selected companies on a medium to long-term investment perspective.