Qatar National Bank (QNB) is looking to increase revenues by moving back into brokerage activities after regulators reversed a 2006 ban on banks trading in shares.
Brokerage activity is going to continue to grow in the future. It is going to be a key area for banks
Roy Thomas, Qatar National Bank
The Qatar Financial Markets Authority (QFMA), Doha’s stock market regulator, gave approval on 15 March for banks to resume brokerage activities on the local bourse, the Qatar Exchange (QE). The QFMA had suspended banks from operating as brokers on the QE in 2006.
“Brokerage activity is going to continue to grow in the future,” says Roy Thomas, senior economist at QNB. “It is going to be a key area for banks and they are really concentrating on it now after the changes made to the regulation.”
“The exchange has now opened up the market to foreign institutional investors by enabling them to invest up to 25 per cent in all stocks,” says Thomas. “There’s a lot of interest from these investors and most foreign fund managers like to deal with banks rather than brokerages.”
The QE is the region’s top performing exchange to date this year, up more than 7 per cent, after closing almost flat in 2009.
However, local bankers say that the QFMA’s backtracking is aimed at boosting trading on the QE. Daily turnover value stood at QR293.4m ($80.6m) at the close of trading on 11 October compared to a daily average of around QR364m in 2009, and historic highs ranging between QR1bn to QR2bn in 2007.