Arqaam expects US$1bn of inflows into Qatar with FTSE upgrade

Sunday, September 20, 2015

Arqaam Capital (“Arqaam”), the specialist emerging and frontier markets investment bank, expects Qatar Stock Exchange to see US$1 billion of passive inflows following its upgrade to the Secondary Emerging Markets Index by FTSE Russel (“FTSE”), the global index provider. FTSE announced on 11 September 2015 that Qatar will be promoted from Frontier to Secondary Emerging market status.

In a note to clients, Jaap Meijer, Managing Director at Arqaam Capital, said “We expect Qatar to have a weight of about 1.4% in the FTSE all-emerging index, which is a combination of secondary and advanced emerging markets indexes, as our base case scenario. This weighting should result in passive flows of about US$1 billion as roughly US$70 billion currently passively tracks the FTSE Emerging Markets Index.”

Arqaam Capital is one of the top institutional full service brokers in the MENA region via seats in key Middle Eastern and African exchanges supported by a strong global network of local executing brokers. Arqaam now covers 260 listed companies in the Middle East and Africa region across 26 countries and a wide range of sectors, including the largest global coverage of MENA equities representing over 60% of GCC market capitalization.

Qatar will be removed from the Frontier index in September 2016. In recognition of the potential liquidity demands arising from its promotion, Qatar’s inclusion as a Secondary Emerging market status will be effected in two tranches. The first tranche of 50% will be implemented in conjunction with the semi-annual review of FTSE GEIS in September 2016 and the second 50% tranche will be implemented in conjunction with the March 2017 semi-annual review.

FTSE Emerging Markets indices are part of the FTSE Global Equity Index Series (GEIS). The series includes large and mid-cap securities from advanced and secondary emerging markets, classified in accordance with FTSE’s transparent Country Classification Review Process. The FTSE Emerging Index provides investors with a comprehensive means of measuring the performance of the most liquid companies in the emerging markets.