DOHA Oct 3 The Qatar Stock Exchange will
introduce margin trading this week in an effort to boost
liquidity on the bourse, its chief executive said on Monday.
Group Securities, a brokerage firm, will be allowed to
execute margin trades from Thursday.
"This initiative primarily aims to boost liquidity in the
market and provide new financing channels for investors,
especially those who are willing to buy large amounts of stocks
for their portfolios," Rashid al-Mansoori, the exchange's CEO,
said in a statement.
Regulated margin trading, in which investors borrow money
from a broker to purchase stocks, increasing the size of their
bets, has been allowed in the United Arab Emirates since 2012
and Oman since 2013.
But Gulf states have been cautious about introducing such
services because of the risk that retail investors - who
dominate trading in the region - may struggle to cover positions
when the market turns against them.
While not the most illiquid stock market in the Middle East,
Qatar struggles to generate large trading volumes, a problem
exacerbated by big government holdings in many companies.
(Reporting by Tom Finn; Editing by Andrew Torchia, Larry King)