Qatar does not see much risk to do­mes­tic stock mar­ket from global volatil­ity: QCB gov­er­nor

Gulf Times Business - - FRONT PAGE - By Pratap John

Qatar does not ex­pect much risk to the do­mes­tic stock mar­ket from global mar­kets’ volatil­ity, due to the coun­try’s favourable macroe­co­nomic fun­da­men­tals, said HE the Qatar Cen­tral Bank Gov­er­nor Sheikh Ab­dul­lah bin Saoud al-Thani ( pic­tured). “We have been closely ob­serv­ing the global mar­ket con­di­tions, es­pe­cially af­ter the trade ten­sions be­tween the US and China. How­ever, the do­mes­tic eq­uity mar­ket so far re­mained in­su­lated from the global de­vel­op­ments,” he said in the con­text of the forth­com­ing Euromoney Qatar Con­fer­ence 2018.

In fact, he noted, the Qatar stock ex­change (QSE) reg­is­tered the “strong­est gain” in the GCC re­gion dur­ing the year so far. The QSE in­dex moved back to the pre-block­ade level.

“Apart from the im­prove­ment in macroe­co­nomic fun­da­men­tals, the rise in QSE is pri­mar­ily driven by the for­eign in­vestors and their pos­i­tive out­look of Qatar econ­omy.

The tight­en­ing fi­nan­cial mar­ket con­di­tions have mainly im­pacted those emerg­ing mar­ket economies (EMEs), which are fac­ing the prob­lem of twin deficits (cur­rent ac­count and fis­cal po­si­tion).

On whether Qatar’s plans to de­velop a “more liq­uid” mar­ket have evolved as the GCC cap­i­tal flows are re­stricted, Sheikh Ab­dul­lah said, “The cap­i­tal in­flows to Qatar are more broad-based and are not re­stricted to the GCC re­gion. Ir­re­spec­tive of all the de­vel­op­ments in the GCC, Qatar will con­tinue its ef­forts for the devel­op­ment of fi­nan­cial mar­ket by mak­ing it more liq­uid and en­cour­ag­ing global in­vestors.”

Re­fer­ring to the 10 years that fol­lowed the fi­nan­cial cri­sis of 2008, the QCB gov­er­nor said, “Ten years since the fi­nan­cial cri­sis, global econ­omy ap­peared to have moved out of the dan­ger zone, even though down­side risk still ex­ists. Ef­forts by the cen­tral banks and other au­thor­i­ties across the globe en­abled this pos­i­tive devel­op­ment in the face of many un­cer­tain­ties and risks.”

He said the global fi­nan­cial sys­tem has also strength­ened, thanks to the fi­nan­cial re­forms in­clud­ing Basel III cap­i­tal and liq­uid­ity reg­u­la­tions. The cri­sis re­in­forced the im­por­tance of in­ter­na­tional co-or­di­na­tion and har­mon­i­sa­tion of strength­ened reg­u­la­tions.

“Greater fo­cus on the sys­tem­i­cally im­por­tant banks shows the change in ap­proach of reg­u­la­tors and in­ter­na­tional stan­dard set­ting bod­ies. Thus, the cur­rent ap­proach of the reg­u­la­tors is pro­vid­ing higher fo­cus on preven­tion of cri­sis.

“Over­all, the global fi­nan­cial sys­tem is more re­silient now, even though it is dif­fi­cult to pre­dict what can be the cause of fu­ture vul­ner­a­bil­i­ties,” Sheikh Ab­dul­lah said.

The two-day Euromoney Qatar Con­fer­ence in Doha on De­cem­ber 9, 10 will fo­cus on Qatar’s post-block­ade strat­egy and its devel­op­ment as a sus­tain­able econ­omy.

The event at St Regis Doha is be­ing held un­der the pa­tron­age of HE the Prime Min­is­ter and Min­is­ter of In­te­rior, Sheikh Ab­dul­lah bin Nasser bin Khal­ifa al-Thani.

Co-hosted by the Qatar Cen­tral Bank, the con­fer­ence’s key­note speak­ers in­clude HE the Min­is­ter of Fi­nance Ali Sherif al-Emadi, and the QCB gov­er­nor.

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