New Market Making Action plan Announced by Qatar Investment Authority (QIA)

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Qatar Investment Authority QIA

The Qatar Investment Authority has launched a new market-making initiative to attract more foreign direct investment into the country. The country’s legal system is conducive to private investment and has a low unemployment rate. Its financial sector is stable, and the regulatory authorities closely monitor economic activity.

Qatar’s legal system is conducive to private investment

The Qatari legal system is conducive to private investment, especially in the oil and gas industry. Sharia Law, the primary source of legislation in the country, governs the country’s laws. The judiciary is independent of the government and is split into two separate court systems: the civil court system, which deals with commercial and criminal matters, and the Shari’a court system, which deals with Islamic law. Sharia law governs marriage and divorce and administers succession and child support.

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The legal system is also friendly to foreign investment. The government has implemented a Qatar Business Environment Strategy since 2007, which aims to make Qatar’s legal system more favorable to private investment. It intends to give full ownership of the business to non-Qataris by 2022.

Qatar’s low political, economic, and business security risks contribute to the country’s attractiveness as a business location. It has one of the lowest levels of corruption among GCC countries, and its attorney general has been named the head of the International Association of Anti-Corruption Authorities. On the Economic Freedom Index, Qatar ranked 28th out of 186 countries. The index measures the quality of government and judicial systems and how conducive they are to foreign investment.

Qatar has a low unemployment rate in Region

Qatar’s unemployment rate is one of the lowest in the world despite the Region’s high level of youth unemployment. As a result, young people in the Region are leaving their villages in search of better jobs. Unemployment rates for MENA countries have consistently exceeded the global average of 13 percent, and youth unemployment rates in the region have increased in recent years. Many MENA youth have not yet reached adulthood because they have been looking for jobs for years. I have dubbed this situation without a condition of wasted energy and potential. In addition, several regional crises have contributed to the high level of youth unemployment, including the 2008 financial crisis and the 2014 drop in oil prices.

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One of the lowest unemployment rates in the world is in Qatar. The country also has a robust economy built on oil and gas revenues. However, Qatar must move to a more resilient model to survive in the future, which focuses on knowledge-based economies, industry decarbonization, and gender equality. These factors will help Qatar’s economy grow in the coming years, and the country’s young global leaders are already playing their part. These junior leaders believe that investing sustainably, building governance frameworks, and empowering women are the keys to ensuring Qatar’s resilience.

Qatar’s Financial Sector is Stable

The financial sector in Qatar is relatively stable, thanks to several factors. The country has a stable sovereign credit rating, and banks are fairly profitable. In 2018, Moody’s and Fitch upgraded the sovereign credit rating outlook to stable, which was followed by upgrades for individual banks. I attributed the improvements to improving macroeconomic conditions and to stable profitability and strong capital buffers.

The oil price decline slowed asset growth and reduced margins. In 2017, oil prices stabilized and recovered, but the country experienced the economic fallout of regional politics. In June 2017, Saudi Arabia announced an economic blockade against Qatar. As a result, deposits from non-resident customers dwindled. Despite the outflow of deposits, the banks protected the sector and continued to operate.

Qatar’s Banking Sector

The banking sector in Qatar is competitive and resilient, even though the economy has been subject to recent economic pressures. It characterized its banks as being “well-capitalized” and “liquid.” The zero-percent repo facility at the QCB is worth QAR 50 billion. Strong efficiency and low provisioning costs support the banking sector’s profitability.

Qatar Investment Authority (QIA) Role in Qatar’s Economy

The Qatar Investment Authority (QIA) has implemented several policy reforms in the last three years to boost the Qatari economy. These measures include reducing the gender pay gap and improving the work environment for women. The authorities are also aiming to boost the number of nationals in the private sector. Recent legislative changes have improved labor market conditions, such as eliminating Kafala. However, the Qatari labor market remains uneven, and men dominate many sectors.

Qatar has increased its foreign reserves and has been involved in several SDR channeling initiatives. This has helped increase banks’ foreign liabilities. Over one-third of the country’s total liabilities are in foreign currencies. This is equivalent to 110 percent of the GDP.

Investors should familiarise themselves with the relevant ministries before investing in the country. A stable government and legal system help the country attract foreign investment. The government has taken several steps to reduce uncertainty and foster a business-friendly environment. Restructuring property rights has also helped reduce uncertainty and enhance the investment environment. Foreign investors need to familiarise themselves with Qatar law before investing in the country.

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