The "good" relative valuation and "strong" macro fundamentals make Qatar's economy well poised to become one of the frontrunners that provide "significant" opportunities for investors seeking higher returns in 2021, a top official of Doha Bank has said.
In this regard, Gudni Stiholt Adalsteinsson, chief treasury and investment officer, Doha Bank, said one of the best ways for investors to seek an exposure to Qatar economy is via Qatar Exchange Traded Funds (QETF), which has provided a cumulative return of 36.5% since its inception in 2018.
"When asking if the Qatar market passes the test of good relative value and strong fundamentals, the evidence is strong," he said.
Qatar has been blessed with strong fundamentals such as vast hydrocarbon reserves and exceptionally high per capita income as well as the government’s strong balance sheet which is becoming a key metric for investors in 2021, he said.
In its latest assessment of the country, the International Monetary Fund (IMF) said the growing natural gas production and a rebound in domestic demand will help Qatar return to economic growth next year.
Notably, IMF recognises the implementation of strong fiscal policy as the country has proactively reprioritised some of the spending and postponed some of the non-core investment project resulting in a projected fiscal deficit of only 6% of GDP (gross domestic product).
"Though picking is becoming more challenging there is always value to be had and the flip side of the coin is that well performing markets will provide significant opportunities for investors seeking higher returns. Qatar’s economy is well poised to become one of the frontrunners when we enter into 2021," Adalsteinsson said.
Highlighting that one of the best ways for investors to seek an exposure to Qatar economy is via QETF; he said the QETF replicates the investment outcome of the Qatar Stock Exchange price index, through investing in the underlying companies based on their individual index weights and is therefore an easy and efficient way for investors to participate in the robust market.
The QETF is open to retail and institutional investors both locally and abroad which benefit from any capital gains as well as the cumulative dividends from the underlying investment portfolio, he said, adding a dedicated market maker ensures adequate secondary market liquidity.
Highlighting that the QSE has been in the top 15 best performing markets out of the close to hundred markets worldwide and the best performer in the Middle East and North Africa region; he said "while no one can predict the future, we believe the QETF is perfectly placed to act as a gateway for investors to the prosperous economy of Qatar."
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