Qatar has been resilient amid the challenges, such as the blockade and the COVID-19 pandemic, which have threatened to disrupt the country’s market movement, an international investment expert said yesterday.
Speaking at the Qatar Stock Exchange (QSE) Webinar, Dr Mark Mobius (pictured), an expert in the industry with over 40 years of investment experience in emerging markets managing over $50bn in assets, and founder of Mobius Capital Partners, noted that Qatar would also find a big audience for an ETF or a Shariah-compliant fund, should it decide to approach some of the big international banks and try to get on the list of the recommended stocks in the international market.
“I think Qatar has been very resilient. Of course market sentiment is reflected in the way the markets move. But generally speaking, Qatar has been very resilient in the face of all these difficulties and challenges. And it’s quite remarkable the degree to which the Qatari government and the people in Qatar have been able to withstand these challenges. I think it’s very encouraging to see that,” he added.
According to Mobius, financial stimulus provided by governments around the world to aid the business sectors have been beneficial, but he reiterated that the ultimate solution for countries to emerge stronger from the pandemic is to open up their markets.
“The ultimate solution is to end the lockdowns. We’re at a situation now where if the lock downs do not end soon, you’re going to see a lot of public strife and violence globally. Governments should as soon as possible open up their markets. Allow people to travel and allow people to move, of course with certain safety precautions,” he said.
He added: “Government aid is not going to be sustainable. Eventually governments around the world will want to hold back on the amount of money supply they have. The Fed is already talking about the possibility of raising rates. Don’t depend on central banks to continue to feed the markets. And in fact, we’re living in a deflationary world, where productivity is going up and prices in real terms are going down. Given that situation, you have to really focus on margins, return on capital, and growth and earnings.”
Mobius, who has been a key figure in developing international policy for emerging markets, and has previously served on the World Bank’s Global Corporate Governance Forum as co-chair of the Investor Responsibility Taskforce, also spoke on the growing role of corporate governance in the business sector post-COVID-19 pandemic.
“In the COVID-19 environment, corporate governance is extremely important. Because the way companies react to the COVID-19 situation really determines the future of that company, as regards to such things as treatment of workers, treatment of customers, how they are governing their finances, and their balance sheet strength which is extremely important. And ESG practice becomes much more salient in this kind of COVID-19 environment,” he said.
He went on to reiterate the results of the studies conducted by his team, which indicate that companies with high governance and ESG ratings do much better in terms of stock performance than other companies.
“That’s been a big additional issue for the major investors around the world. And if you’ll look at any major pension fund or sovereign wealth fund, they’re looking at these factors very closely. Transparency is number one.”
Mobius also spoke about giving incentives such as tax benefits to encourage local companies to be listed. He also encouraged state-owned companies to get listed in order to increase liquidity in the market.