Qatar Petroleum plans to list on Qatar Exchange four subsidiary companies worth $50 billion over the next two years, Qatar Exchange Chairman Hussein Ali al Abdullah said, in Doha, on Wednesday.
Taking part in a discussion panel during the forum of ‘Listing of Private Companies: Supporting Qatar’s National Vision,’ Abdullah said the most important benefits of listing companies are the continuity of the company, and maintaining its survival and cohesion especially in family businesses.
Highlighting Qatari government’s motivation of the private sector and encouraging family businesses to turn into public shareholding companies listed on the Qatar Exchange, he underlined the necessity of having flexible legislation and regulations that suit the business environment in Qatar so that companies are encouraged to make the transition.
Abdullah also urged market regulators in the Gulf region to coordinate and unify so as to create entities that suit the listing of regional companies, encourage family businesses to list, and attract efficient cadres to achieve this goal.
“The value of public companies tends to be higher than for comparable privately held companies. Selling shares to the public increases a company’s equity base benefitting the balance sheet and allowing a company to create customers and suppliers alike and may even deliver as improvement to the terms of business,” Qatar Exchange CEO Rashid al Mansoori said.
“Acquisitions of private or listed companies are often more easily completed if a company is publicly traded and shares have a transparent market value,” Mansoori said.
“The drive for disclosure forces re-evaluation of systems and management underlying operational efficiency of the business,” he said.
“A public market in a company’s share means employee-share schemes enable staff to share in the company’s financial success and increase their commitment to the business. A company may also benefit from the quality of staff.
“For family, financial or minority shareholders a public offering monetises the value of the company at a market-driven price and the liquidity provided enables shareholders to more easily realise the value if, and when they so choose,” Mansoori said.
Qatari Businessmen Association Chairman Sheikh Faisal bin Qassim al Thani spoke about his experience in listing his company Aamal on Qatar Exchange in 2007.
He said, “The decision to list the company on Qatar Exchange came after careful and deep study, which showed the benefits of being listed.” “The desire to ensure the continuity of the company’s success was the motivation to transfer from a private company to a shareholding company listed on the stock market. Other reasons for the listing were the desire to broaden the base of shareholders and take advantage of various investment opportunities offered by the Qatari economy which is growing at a fast pace,” he said.
Sheikh Faisal said, “The reasons that prevent the companies’ owners from listing are the difficult listing procedures and legal requirements, the fear of higher taxes and fees, compliance with accounting and regulatory requirements, and the fear of owners to lose control; nevertheless these concerns are not equivalent to the benefits, which can be gained by the company in the long term.” “We have noticed that there are several Qatari companies, which were established and grown in previous decades, but completely disappeared from the economic arena.
“Thus the transformation of these companies and the development of their work mechanisms and management practices ensure the company’s growth, sustainability and development in line with the development of the financial markets in which they operate,” he said.
