The Qatar Financial Markets Authority (QFMA) has proposed cutting the par value of shares listed on the stock market to 1 riyal from 10 riyals, according to a document seen by Reuters, in a move that could boost market liquidity and make it easier to conduct IPOs. The regulator sent the proposal to industry participants, market sources said. It was not clear when the reform might be introduced; officials at the QFMA could not be contacted to comment.
Qatar's market is thinly traded compared to some others in the region, such as those in the United Arab Emirates. This makes it harder for companies to conduct initial public offers of shares; the last IPO occurred in 2010.
One reason for the thin trade is the high market prices of some shares in Qatar - Qatar National Bank's share price is around 165 riyals ($45.3), for example, compared to 5.5 dirhams ($1.5) for top Dubai bank Emirates NBD. High prices can mean large bid-ask spreads and small percentage movements in stocks, making them less attractive for smaller investors to trade.
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