Qatar plans to create a secondary initial public offering (IPO) market dedicated to trading shares of small and medium-sized enterprises, just weeks after Dubai said it would create a similar equity market.
The May 25 decision to introduce a secondary bourse in Qatar will boost investment opportunities and improve liquidity, the chairman of Qatar Exchange said.
“The SME’s market will offer the investors as well more options through increasing the number of companies to invest their shares in,” vice chairman Ahmad Al Sayed said in a statement.
The criteria for listing shares of SMEs on the Gulf state’s bourse will be “lighter and [more] flexible” than regulations for other institutions, he said.
Small firms in the Gulf have faced difficulties in accessing loans in the wake of the global crisis as banks are hesitant to lend to lesser-known entities. Bank lending to SMEs in the region represents two percent of total loans compared to 14 percent in non GCC-countries, UAE government data found.
Gulf governments have urged local banks to ramp up lending in a bid to accelerate economic growth. The governor of the UAE Central Bank this week said banks should slash interest rates on loans to businesses amid “abundant” liquidity The Gulf’s trade and tourism hub is expected to approve a law this year to improve financing for SMEs, according to UAE economy minister Sultan Al Mansoori.