Almost two years on from the start of the blockade, Qatar’s economy remains in robust health. Despite the embargo, and a turbulent global landscape, the Qatar Stock Exchange (QSE) was the best performer in the world in 2018, rising 24%. October 2018 saw another landmark, when the Qatar Aluminium Manufacturing Company (Qamco) became the 46th listed entity on the QSE. Further listings are expected in 2019.
Internationally, many foreign institutional investors have bought into the Qatar story and billions more dollars await the right opportunities.
As well as strong economic indicators, the race to attract capital and investments will be won by those countries that have the best possible regulatory environment and are able to smooth the way for corporate access.
That’s where Qatar has an opportunity to steal a march on the rest of the region and set the standard in capital markets.
In a major change that will take place in October this year, Qatar will be introducing a mandatory “rules-based” framework for investor relations (IR), which includes three key measures to ensure that listed companies focus more on their IR functions. The roll-out of this initiative is being led by the QSE.
The framework stipulates that all companies must: appoint a dedicated and suitably qualified Investor Relations Officer (IRO); create an IR section on their company websites, made available in both Arabic and English; and provide periodic updates through quarterly investor presentations and investor calls hosted by a C-level executive.
To communicate the importance of the new framework and explain how the rules will work in concept and principle, the QSE convened on 14 March a workshop attended by over 80 people from QSE-listed companies.
As Qatar strengthens regulatory frameworks and creates an environment conducive to further economic growth, the country’s growing roster of listed companies need to respond and improve their approach to IR.
IR has been seen as a low priority or a poor relation to PR. Having a clear IR strategy should be a board level responsibility with a seat at the top table.
In the US, for example, the role of the investor relations officer in a company is often a staging post on the way to a senior executive role.
The recent developments in Mifid II, together with this year’s rules change, means that disclosure and transparency will have to grow through an increasing focus on IR.
A successful IR strategy is a mix of art and science and should be implemented over a long-term timeframe. In the words of legendary investor Warren Buffet, “the role of an effective IR campaign is to attract investors who never sell”.
If you don’t have the in-house expertise to develop a solid IR plan, or if you’d just like the benefit of a fresh outside perspective, consider hiring external IR advisers — which can help provide the judgment, industry knowledge, investment community relationships, and capital markets expertise that you need to succeed.
Portland, which has a significant presence in Qatar, advises companies on effective engagement with investors. We work with our clients to promote and build their investment case and reputation with equity markets investors and commentators. Our team is engaged by clients either as part of a wider integrated approach, or through a bespoke IR programme.
QSE listed companies have nothing to fear from the new rules. Higher standards of IR and levels of transparency will inevitably lead to greater coverage by regional and international analysts, which in turn creates a clearer picture for international investors eyeing a part of Qatar’s economic story.
For companies aiming to increase their market capitalisation, a deeper pool of long-term domestic and international investors represents a great opportunity. The efforts of the QSE to enhance the development of Qatar’s capital markets is part of the 2030 Nation Vision and its blueprint to diversify the economy, and should be applauded.