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By Tom Finn
DOHA Oct 10 Qatari banks Masraf Al Rayan
and Doha Bank plan to launch the Gulf
state's first exchange-traded funds (ETFs) by the end of 2016, a
move that should boost capital flows into the local stock
market, a bourse official said.
The launch of ETFs - portfolios of stocks that track an
index - could boost a market that has been pressured in recent
months by low natural gas prices and limited liquidity.
"We expect both (ETFs) to launch by the end of the year," a
Qatar Exchange official told Reuters, declining to be named as
he was not authorised to talk publicly. He did not give further
Spokespeople for Doha Bank and Masraf Al Rayan confirmed
that ETFs were being pursued but declined to comment on any
Since they involve low management costs and trade on
exchanges, ETFs can give foreign investors a cheap, convenient
route into emerging markets.
"ETFs are now a $4 trillion asset class globally, so global
investors understand them well. As with any new product, local
investors will rightly take their time to gain comfort and
understand the advantages and uses," said Akber Khan, director
of Asset Management at Qatar's Al Rayan Investment.
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. Last
week the exchange introduced margin trading in an effort to
(Editing by Andrew Torchia and Angus MacSwan)