Qatar remains one of the most promising markets in the region for 2022 in the build up to the 100 percent Foreign Ownership Limit (FOL) implementation, the FIFA World Cup Qatar 2022, higher oil and gas prices and prospective future economic outlook, said QNB Financial Services (QNBFS) report.
The Qatar Stock Exchange has outperformed in 2022 and the QE Index has been the best performing index in the GCC region. The Index is also currently the fourth-best performing index globally with a total return of 26.4 percent. Qatar remains one of the most promising markets in the region and worldwide, primarily due to positive momentum. Making a reference to global safe-haven for investors, the report noted, “Among the global safe-haven alternatives for investment, the Qatar Exchange has been a key beneficiary of flight-to-safety for investors looking to sidestep the Russian crisis. Overall net investment buy activity (foreign plus GCC/Arab institutions) reached the equivalent of $2,936m, already overtaking the entire investment flows of $2,063m achieved during the full year 2021.”
The report highlighted three banks (Qatar Islamic Bank, Qatar National Bank and Masraf Al Rayan) have fully implemented their 100 percent Foreign Ownership Limit (FOL) requirements and the Qatar Central Securities Depository has modified the foreign ownership limit for all three of them to be 100 percent of capital.
It further said that FIFA World Cup Qatar 2022 will act as an important catalyst in driving the domestic market. According to Qatar’s Supreme Committee for Delivery and Legacy, this major global event is expected to contribute $20bn to the economy, in sectors such as tourism, sports and construction. It also noted that Qatar’s huge LNG expansion plan will drive overall demand and growth over the coming years. The LNG expansion will see Qatar’s overall LNG output increasing by 64 percent to reach 126 million tons per annum (MTPA), from the current 77 MTPA.
“We note that Qatar should remain among largest global LNG exporters,” it added.
In relation to rising oil and gas prices, the QNBFS report said, sanctions by western countries on Russia are causing global oil and gas supply concerns, which in turn are having a major impact on global oil and gas prices. Brent crude prices averaged $108/b in March 2022, with LNG prices (Japan/Korea Import prices) averaging $16.0/MMBtu in February 2022. Higher oil and gas prices will lead to higher government revenues for Qatar, enable flexibility in government expenditures and improve overall money supply (liquidity). Moreover, higher commodity prices continue to heighten investor appetite for Qatari equities.
