DOHA: Qatar’s capital market regulatory authority is working on a draft proposal ahead of considering to bring in better transparency and disclosure practiceS to the market. The proposals include a series of recommendations to make the market more efficient, people with direct involvement in drafting the proposal revealed to The Peninsula.
“We have recommended changes in the ‘rule book’ regarding the disclosures and information sharing to the investors, which are currently under review of QFMA. The highlight of the recommendations is to make it mandatory for investors to get relevant information required for their investment decisions”, sources at one of the key government entities told The Peninsula.
The challenge in the local market has been that when potential investors talk to a company, they are looking to meet the CFOs to discuss key numbers and business models. These opportunities are often denied to investors, especially the companies of which major stakes are being controlled by the government entities. It is important for the investors to understand companies before taking their investment decisions, he said.
The investors need to assess the opportunities and risks before taking any investment decisions. Qatar has far to go to improve transparency and corporate disclosures to appropriate levels.
“When the investors look at Qatar, they very well understand the macro story. What they will be looking for are the companies. If they don’t get to meet the management and the numbers that they are looking for, they will not invest”, the source added.
Ideally, the prime responsibility of an Investor Relations Officer (IRO) is to keep the market informed of developments and events that may influence the share price, in a reliable, consistent, comparable and transparent manner, which is unfortunately missing in the market.
Speaking to The Peninsula recently, a series of fund managers had stressed the need for Qatari market becoming more ‘efficient’, especially in view of the some of the neighbouring markets increasingly becoming favourite destination of foreign investors.
“In Qatar, the government, directly or indirectly, is the primary shareholder of the majority of listed companies. Unfortunately, many of these companies do not pay sufficient attention to other shareholders. “To help a company, investors need to realise its true market value. Management teams should consider the requirements of all shareholders, who are all part owners”, a top fund manager had said.
The new guidelines are expected to make it mandatory for the management to improve transparency, corporate access and a better disclosure practice, sources said.
