(MENAFN- The Peninsula) By Satish Kanady / The Peninsula
DOHA: Riding a wave of popularity in the global market, the Qatar Stock Exchange (QSE) yesterday listed the market's first Exchange Traded Fund (QETF) on the bourse under the ticker ‘QETF'.
Investors looking for exposure to Qatari market, but wanted to avoid selecting stocks themselves, now have the additional choice. The Fund will track the QE Index that measures the price performance of the top 20 largest and most liquid companies on Qatar Stock Exchange.
Investors can now buy a QSE replica in one single decision. QETF can be bought and sold like any other stocks on the exchange through brokers. As QETF tracks the QSE benchmark index, it allows investors to obtain exposure to a diversified portfolio with one single decision.
The listing of the QETF was formally announced in a ceremonial bell-ringing held at Qatar Stock Exchange. Established by Doha Bank and managed by Amwal, the QETF is arguably the largest ETF in the GCC. The Group Securities, as the QETF's Liquidity Provider will support trading by making competitive 'two-way pricing, allowing investors to trade QETF with ease. The Group will maintain the supply of ETF units and ensure the ETF's price is in line with the value of its underlying index portfolio. Standard Chartered Bank will act as custodian and fund administrator. After launching the Fund, Rashid Ali Al Mansoori, CEO of the Qatar Stock Exchange said: 'Great thought and effort has gone into the development of an ETF market at QSE and a listing based on our main index was always going to be a proud moment. There's no denying the popularity of ETFs globally and we're excited at the new trading opportunities the ETF provides to our investors.
Speaking on the sidelines of the event, Dr R Seetharaman, Group CEO, Doha Bank said: It's a milestone for Qatari economy. The Fund is a very unique in value proposition for local investors, international investors individuals as well as institutional investors…. The initial size of the fund is QR150m. It is subjected to change as the market fluctuates. We are targeting $2bn during the first year.
'Through our collaboration with Amwal and The Group Securities, we believe the QETF holds immense promise and opens a gateway to the Qatari market for global investors. We expect this to be the first of many future products focused on Qatar, Dr Seetharaman said.
Sheikha Hanadi Nasser bin Khaled Al Thani, Chairperson of Amwal commented: 'Amwal is proud to have the QETF as part of its product portfolio. Passive investment strategies are playing a bigger role for institutional investors looking for emerging market exposure as part of their global asset allocation.
Better-than-expected response
The market gave an overwhelming reception to the QETF as the first day witnessed the trading of over 60,000 units at a value of over QR5m. The Fund, however, closed 1.6 percent down.
The bid-offer spread of 3-4 dirhams was maintained for most of the trading session. This is useful as it encourages investor participation, a top market expert told The Peninsula.
'It was a great start. We are expecting higher trade going forward as the investors will understand more about the product, Talal F Samhouri, Head of Asset Management, Amwal, told The Peninsula.
Akber Khan, Senior Director-Asset Management Group, Al Rayan Investment, commented: 'A successful day for Doha Bank, Amwal and Qatar as the largest ETF in the region is now listed in Doha. Trading liquidity and the bid-offer spread were enhanced by the liquidity provider.
The QSE's benchmark index was down 3.16 percent.
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