The Qatar Stock Exchange (QSE), which is positioning itself as a premier destination in the region for systematic and sustainable investments, has witnessed foreign funds inflow of more than $1.3bn so far this year, a senior official of the bourse said on Monday.
“We attracted net foreign inflow of $2.5bn in 2018 and the trend continues to date where we have attracted over $1.3bn year-to-date,” QSE Marketing and Communications director Hussein Mohamed al-Abdulla told Smart Sustainability Forum, jointly organised by QSE, FTSE Russell and the Qatar Financial Center.
Smart sustainability is the combination of sustainability parameters and risk premia via factor exposure within a single index solution. It reflects the growing demand for the incorporation of both factors and ESG (environment, social and governance) data into investment tools, including indices.
The increasing trends of international investments inflows indicate the overseas funds’ affinity towards the QSE after its upgrade to emerging market status by many entities, including FTSE Russell.
Highlighting that smart sustainability, or ESG, has been increasingly getting into the vocabulary of investors; he said the modern investors have started looking beyond the financials of the companies before taking decision.
“With changing investor demographics, rising risks from the climate change, gender inequality and compromised corporate governance, it is clear that there is more to just financial statements when deciding on which companies to invest in,” al-Abdulla said.
In 2016, the QSE joined the United Nations’ Sustainable Stock Exchanges initiatives and published ESG reporting guidelines for listed companies. In 2018, the bourse launched its ESG platform as the first in the region to encourage listed companies to report their ESG activities.
“We are working with our regulator on a plan to promote further adoption of ESG practices by our listed companies,” he said.
ESG factors will have an impact on access to capital; revenue growth potential and market access; risks, costs and productivity; brand value and reputation; and human capital, employee recruitment and retention, according to the QSE's ESG guidelines.
The QSE has already pitched for a mandatory ESG reporting by the listed companies, which helps investors determine a company’s ability to create value on a sustainable basis.
FTSE Russell chief executive Waqas Samad said globally, the trend has been from active to passive investments owing to “significant” growth in exchange traded funds (ETFs), which have breached $5tn mark.
According to its 2019 global survey findings from asset owners, FTSE Russell said globally, nearly six in ten asset owners are currently implementing or evaluating ESG considerations in their investment strategy, even as pronounced regional differences in ESG usage exist.
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