Thursday, May 15, 2014
Dubai - The UAE and Qatar yesterday crossed a key mile stone in opening up their respective equity markets to foreign investors as global markets index provider MSCI officially reclassified the MSCI UAE and MSCI Qatar Indexes from Frontier Markets to Emerging Markets.
“MSCI’s reclassification of these countries and their upcoming inclusion in our flagship MSCI Emerging Markets Index reflects the broader global opportunity set available to international institutional investors today,” said Baer Pettit, Managing Director and Global Head of the MSCI Index Business.
The nine companies in the newly constituted MSCI UAE Index are Abu Dhabi Commercial Bank, Aldar Properties, Arabtec, DP World, Dubai Financial Market, Dubai Islamic Bank, Emaar Properties, First Gulf Bank and National Bank of Abu Dhabi.
“The UAE and Qatar have strong diversified economies with solid financial backing and limited risks which foreign investors would find very appealing,” said Jeffrey Singer, CEO of DIFC Authority.
The MSCI Qatar Index included 10 companies such as Al Rayan Bank, Barwa Real Estate, Commercial Bank of Qatar, Doha Bank, Ooredoo (telecoms) Qatar Electricity & Water, Qatar Industries, Qatar Islamic Bank, Qatar National Bank and Vodafone Qatar.
“The decision by MSCI to raise UAE and Qatar from frontier-market to emerging-market status, effective end of May 2014, serves to underline this growing prominence and marks an important step,” Bassel Khatoun, Co-Head MENA Equity Local Asset Management - MENA at Franklin Templeton Investments.
Overall analysts expect a boost of $1.5 billion to $2 billion in market capitalisation across these two markets in the next 12 to 18 months. But over a longer time horizon the valuation impact is expected to be much larger.
“The upgrade is expected to attract up to $15 billion of new inflows over the next five years from international institutional investors, which when combined with what we hope will be subsiding retail investor speculation, should lead the markets further towards maturity,” Khaled Sifri, Chief Executive Officer of Emirates Investment Bank.
By Babu Das Augustine Deputy Business Editor
Gulf News 2014. All rights reserved.
