Qatar, In One Of The Biggest IPO Of Middle East, Plans A $12B Fund

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In one of the largest initial public offerings (IPOs) in the Middle East, Qatar is planning to offer shares in a new $12 billion investment vehicle in May.

The authorities announced the formation of the new investment vehicle two months ago. According to some experts, Qatar’s move is aimed at enhancing its global clout and for the well being of the tiny population.

Qatar, In One Of The Biggest IPO Of Middle East, Plans A $12B Fund

Chairman of Qatar Exchange, Hussain Ali Al Abdulla, said in an iterview on Sunday that the investment vehicle – called Doha Global Investment Co – will be listed on the local exchange after the expiry of the public subscription period.

The chairman added that offerings will be available for Qatari companies, institutions and citizens, however, foreign investors will be able to apply for the shares only after the as-yet unspecified listing date. The nominal value of the shares is fixed at 10 Qatari riyals.

The investment vehicle will half-owned by the sovereign wealth fund and will invest in a variety of assets. The investment will boost the Qatar’s already extensive and expanding portfolio that includes investment in German car-makers Porsche and Volkswagen AG (ADR) (PINK:VKLAY) to Tiffany & Co. (NYSE:TIF), the American jeweler.

Ahmad al-Sayed, chief executive of Qatar Holding, the sovereign wealth fund, said in February that the investment firm will allow the local investors and companies “the opportunity to enjoy the access and deal flow that Qatar Holding has.”

Qatar’s sovereign fund arm Qatar Holding will contribute $3 billion worth of assets into the new firm and a similar amount will be raised from an initial public offering on the Qatar Exchange.

Qatar Holding has been known for its high-profile investments even during the financial crisis and this new aspect of the fund makes it different from its other Gulf counterparts.

The Gulf region has already witnessed one big IPO this year, Iraqi telecom firm Asiacell. In one of the largest deal in more than half a decade, the Telecom Company raised US$1.4 billion from the offering.

The Qatar exchange has underperformed some of the exchanges in the region this year like that of Dubai and Saudi Arabia. This was due to the fact that the Qatari firms were not able to fully take advantage of the country’s economic growth.

The authorities are hopeful that the listing of the new investment vehicle will enhance the liquidity and investor interest in the exchanges.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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