Experts Optimistic About Qatar Exchange's Reduction of Stocks' Face Value

Doha, October 07 (QNA) - A number of experts said Saturday that Qatar exchange's move to lower the face value of listed companies to QR 1 from QR 10 will have a positive impact on the stock market. They stressed that it was important to raise awareness among investors in the stock market, whether inside or outside the country, on the goal and the nature of the new system. Dean of Qatar University's College Of Business and Economics Dr Khalid Al Abdulqader said that the new system will have a very positive impact, especially that the Qatari economic is a very attractive and promising one. He added that there are many benefits to implementing the new system, most notably allowing a bigger number of small investors to gain access to shares. He noted that this segment, after accessing the market, will help support liquidity. He pointed out that the Qatari market has the potential to implement this system, adding that one of the system's advantages is reducing the risk of investors in the event of a decline in the shares. The Dean of Qatar University's College Of Business and Economics pointed out that there is a need to educate investors on the new system, as some could be led to believe that the value of their holdings will decrease, something that is not true. This is because the total number of shares held will increase, making up for the decline in per share value and leaving the total value of holdings unchanged. For his part, Acting Manager of securities& IPO Listing Affairs at Qatar Financial Market Authority (QFMA) said on a workshop on the new system will help increase the value and volume of shares traded. He added that the system will also help investors who hold stocks for long periods to overcome this and stimulate them to trade even a fraction of those shares after their split, stressing that the system will also allow the investor to diversify their portfolios. He said that the reason behind the introduction of the new system was the desire to introduce new capital on the stock exchange and attract new investors to it, explaining that the decision to reduce face values is mandatory for all 45 companies listed on the Qatar Exchange and not optional. He noted that the stock exchange has established a committee that will raise awareness among investors on how the new system will work. Qatar Exchange's Samer Abo Ghazla said that the new system will divide the face to QR1 a share, down from QR10 a share. He added that this means that any investor who has a share with a face value of QR10 will get 10 shares in the new system, a 10-1 stock split. He noted that there were three main goals behind establishing the system. The first was increasing the breadth of the market, the second was increasing liquidity, and the third was attracting new investors. He added that the number of investors in the stock market has reached one million. (QNA)