Qatar opened its first formal stock exchange Monday, allowing the small Persian Gulf state to sell state-owned assets and generate revenue.
The emir, Sheik Hamad ibn Khalifa al Thani, had deposed his father in a palace coup in June 1995 and immediately set about liberalizing the government-controlled economy.
"The objective of the new stock exchange is to create a better investment environment in Qatar," said Hussein Abdullah, director of Doha Securities Market (DSM) and chairman of the Government Investment Bureau.
"We intend to sell state-owned companies to provide investment opportunities for Qatari nationals, and for the government to acquire the required revenues to continue the current economic drive," Abdullah said.
Andersen Consulting, a unit of New York and Geneva-based Andersen Worldwide, has acted as advisor to the DSM in setting up the market's regulatory framework.
The new stock exchange will initially be open only to Qatari nationals, who number about 120,000.
By the end of l997, though, foreign investors will be able to trade Qatari shares through owning up to 49% of locally incorporated mutual funds, officials said.
Abdullah said the exchange will first open to residents of the Gulf Cooperation Council, which groups Saudi Arabia, Qatar, Kuwait, Oman, Bahrain and the United Arab Emirates, in 1998, and to non-GCC residents in 1999.
At the ringing of the bell Monday, the new exchange listed 17 companies that are already traded on an over-the-counter market. The market capitalization for the 17 companies is about $2 billion.
Qatar National Bank, which is 50% government-owned, will account for more than one-third of the market's capitalization.
Qatar's population enjoys one of the most generous welfare systems in the world. Citizens pay no income tax, and the government provides free education and health care.