Nick Wilson, chairman of the Qatar Investment Fund, said “huge” infrastructure expenditures, which include a Metro System, a 400,000 capacity city, and a Qatari mall, will attract increasing numbers of expats who will require financial services.
As a result, the Isle of Man-domiciled fund’s top three holdings are currently in the Qatar National Bank, the Commercial Bank of Qatar, and the Qatar Islamic Bank, while 52% of its total allocation is in banks and financial services.
Wilson added that Qatar’s listing on the MSCI Emerging Markets Index in May last year will continue to boost its economy over the coming year.
He said the country has already seen a large increase in foreign investment and liquidity.
Financial focus
While expats in Qatar are less financially focused than those in Dubai, Wilson said “more and more” UK and European residents are moving over to the country to capitalise on the career options offered by its expanding economy and size.
“When people move over to Qatar as expats they will need to be exposed to financial services for advice and tax guidance on their earnings, which will subsequently create more senior positions,” he added.
He said Qatar is better placed than other members of the Gulf Cooperation Council (GCC) – the political and economic union consisting of all Arab states of the Persian Gulf excluding Iraq – due to its geographical placing, diversified hydrocarbons, high levels of aluminium production, and growing financial services industry.
“Qatar wants to attract further asset management companies to open up offices, and the Qatar Financial Centre is currently a work in progress,” he said.
He said such companies should be attracted by the country’s GDP, which is the highest in the world, and its infrastructure value, which is expected to increase by $180bn (£117bn, €162bn) over the next five years.
The country, which generates a significant amount of its GDP from oil production, has also been protected by the recent fall in oil prices, which in January saw the price of a barrel drop to its lowest price since 2009.
Oil
Oil companies in Qatar have long term contracts and upper and lower price caps which protect investors from significant drops, said Wilson.
The QIF was formed in 2007 with the aim of capitalising on the investment opportunities in Qatar and the GCC region, arising from the economic growth being experienced in the area.
It is listed on the London Stock exchange and invests in quoted Qatari equities listed on the Qatar Exchange in addition to companies soon to be listed.
It had $237.7m net assets as of 31 December last year as well as a management fee of 1.05% and an annualised ongoing charge of 1.74%.
Growth
In January, the QIF announced that its net asset value per share net of dividends had increased by over 20% in 2014, despite dropping in the final quarter.
For the whole of 2014, the company outperformed an 18.4% rise in the Qatar Exchange (QE) Index.
As a whole, Qatar’s real GDP rose by 6% in the third quarter of 2014 compared to Q3 2013, largely fuelled by the non-hydrocarbon sector, which grew by 12%.
