A sizable follow-on equity offering in Qatar, one of the Middle East’s quietest markets for share sales, is stirring tentative hopes for a pickup in activity on Doha’s bourse.
The Abu Dhabi Investment Authority raised $552 million last week by selling a 5% stake in Ooredoo QPSC, Qatar’s biggest telecom operator, through a fully-marketed secondary offering — the country’s first of its kind.
The transaction shows that Qatar is “open for business” and willing to engage with international investors, said Miguel Azevedo, vice-chair of investment banking for Middle East and Africa at Citigroup Inc., one of the deal’s arrangers.
“It may not trigger an immediate wave of IPOs, but it’s a necessary first step, proof that it can be done,” Azevedo said.
Doha has largely been left out of the wave of share sales sweeping the Gulf in recent years, as governments seek to deepen capital markets by listing assets and encouraging private sector IPOs.
Only $372 million has been raised through two listings in Doha since 2020, and there were no secondary share sales until the Ooredoo transaction, data compiled by Bloomberg show. This is in stark contrast to the UAE, where such offerings have eclipsed IPO volumes this year to raise close to $5 billion. Some now see signs of change.
Rudy Saadi, head of Middle East and Africa (ex-SA) equity capital markets at Citigroup, said that a significant proportion of the book in the Ooredoo transaction was allocated to international investors, with some providing anchor-sized commitments during early marketing.
The deal will lift Ooredoo’s free float to at least 27% from 22%, driving demand by a re-weighting within indexes, Chief Executive Officer Aziz Aluthman Fakhroo told Bloomberg News last week.
Qatar, with its vast natural gas wealth, faces less pressure than Saudi Arabia or the United Arab Emirates to raise funds through equity sales to finance diversification plans. Still, officials have been taking steps to boost market liquidity and broaden participation, including allowing short-selling and offering incentives for firms to relocate to the country as it competes with Dubai and Riyadh to attract financial activity.
The stock exchange’s new chief executive officer, Abdulla Mohammed Al Ansari - who took over last year after serving as director of Qatar Funds at the $524 billion Qatar Investment Authority - may potentially signal a stronger push to activate the market, as wealth funds have been key drivers of privatization programs elsewhere in the Gulf.
There are some signs of more ECM activity in the pipeline. State-backed Gulf International Services has announced plans to list its unit Al Koot Insurance and Reinsurance and Amwaj Catering Services on the local bourse.
But Qatar’s path toward a more active equity market will depend on regulatory adaptation, local market champions, and a steady pipeline of offerings to sustain investor interest, Citigroup’s Azevedo said.
“Other Gulf capitals have pursued listings to improve governance, management quality, and attract talent,” he added. “Qatar could follow a similar model - pursuing listings out of conviction, not necessity.”
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