VZCZCXRO7819
PP RUEHDE RUEHDH RUEHDIR
DE RUEHDO #0415/01 1751214
ZNR UUUUU ZZH
P 241214Z JUN 09
FM AMEMBASSY DOHA
TO RUEHC/SECSTATE WASHDC PRIORITY 9176
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 02 DOHA 000415 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EFIN EINV QA
SUBJECT: QATAR PARTNERS WITH NYSE EURONEXT TO REBRAND SECURITIES 
MARKET 
 
---------------- 
(SBU) KEY POINTS 
---------------- 
 
-- Rebranding its bourse as "Qatar Exchange" (formerly the Doha 
Securities Market), the Qatar Investment Authority (QIA) and NYSE 
Euronext announced June 19 a formal agreement to give the latter a 
20 percent stake in the exchange (for $200 million) in exchange for 
services and technology assistance, and a leading management role. 
 
-- The agreement will not change existing market practices or 
regulation in the short-term, although it envisions a future 
exchange that can accommodate more diverse products and will invite 
more international investment. 
 
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(SBU) COMMENTS 
-------------- 
 
-- The launch of Qatar Exchange is Qatar's latest success in luring 
internationally-recognized firms to provide technology and knowledge 
transfer, in exchange for a piece of the fast-growing Qatari 
economy. 
 
-- Modernization of the Qatar Exchange's processes could help it 
become more competitive and efficient, giving it an advantage in 
competition with other Gulf markets. 
 
-- A small coterie of Qatari officials managed the formation of this 
venture.  The model is similar to the Qatar Financial Center, where 
the GOQ parachutes in an internationally-recognized system to 
quickly upgrade Qatar's image and capabilities, vice pushing for 
incremental reforms of the private sector. 
 
-- Qatar Exchange remains a relatively small operation - with only 
43 listed companies and market capitalization of about USD 75 
billion.  While not a bellwether of Qatar's overall economic health, 
many Qataris are invested in the exchange and so its fluctuations 
have a significant influence on personal financial health. 
 
End Key Points and Comments. 
 
¶1. (U) Announcing the agreement in soaring language, Qatari Prime 
Minister Hamad Bin Jassim Al Thani (who is also the QIA CEO) said 
that the new bourse "paves the way for Qatar to take a prominent 
role in the world's capital markets for the benefit of both the 
people of Qatar and the Middle East more generally.  Our vision is 
to create a world class financial center around a global exchange 
that is on par with the deepest pools of capital across Europe, the 
U.S. and Asia." 
 
¶2. (U) The most immediate consequence of the venture is that NYSE 
Euronext will provide Qatar Exchange with its latest generation of 
trading technology (Universal Trading Platform).  NYSE Euronext also 
committed to use Doha as its Middle East operational and support 
hub, a coup for Qatar in its competition with other regional 
financial centers.  Qatar Exchange will also reportedly seek 
listings in New York and Paris. 
 
¶3. (SBU) The agreement also envisions Qatar Exchange as a platform 
for developing more diverse products.  For example, Qatari officials 
have expressed interest in developing an energy derivative. 
 
-- The QIA also owns the "International Mercantile Exchange" (IMEX), 
a QFC-registered firm with offices in London and Doha whose goal is 
to create regional trading hubs and a commodity exchange for 
hydrocarbons and related products. 
 
¶4. (SBU) Qatar Exchange will continue to be regulated by the Qatar 
Financial Markets Authority (QFMA). 
 
-- The QFC Regulatory Authority Managing Director for Financial 
Sector Development and Policy told Econoff Fabrycky June 23 that the 
QFC was not directly involved in the launch of Qatar Exchange, 
though it did consult with the partners as they came to agreement. 
If Qatar continues to move toward a single, unified regulator (a 
process delayed indefinitely by the economic crisis and pushback 
from parts of the Qatari government), than QFC regulators will 
eventually assume a prominent role in shaping the regulatory 
environment for the exchange. 
 
¶5. (U) NYSE Euronext will take a 20 percent stake in the market for 
USD 200 million.  QIA will retain 80 percent of the market through 
its subsidiary Qatar Holding (Note: Qatar Holding is registered in 
the Qatar Financial Center and is the strategic and direct 
investment arm of the QIA.) 
 
-- The exchange's new board will be headed by Dr. Khalid Al-Attiyah, 
the Minister of State for International Cooperation who was recently 
 
DOHA 00000415  002 OF 002 
 
 
also appointed Acting Minister of Business and Trade. (Note: While 
an able public servant and trusted by the Amir and other senior GOQ 
officials, Al-Attiyah will have a full plate balancing his new 
business responsibilities with his traditional role in the Foreign 
Ministry). 
 
-- Qatar Holding's Managing Director Ahmed Al-Sayyed will serve as 
the Board's Vice Chairman. 
 
-- Andrew Went, a former Managing Director for NYSE Euronext's 
Amsterdam operations, was appointed as CEO of the exchange. 
 
-- NYSE Euronext will take three of 11 seats on the board, while QIA 
will appoint six, and two will be independent.' 
 
¶6. (SBU) The former DSM General Manager Saif Khalif Al-Mansoori 
previewed the deal for Econoff Fabrycky in early June, noting that 
the DSM had been working with NYSE for years and all of the current 
staff would be retained - as a result, he expected a quick 
transition. 
 
LEBARON