NYSE Euronext to buy stake in Doha exchange

The state of Qatar has agreed to sell 25 percent of the Doha Securities Market to NYSE Euronext (NYX.N) for $250 million in a bid to become the booming region's financial hub and extend global links.

Transatlantic bourse NYSE Euronext -- which comprises the New York Stock Exchange and several leading European bourses -- said on Tuesday the deal was its largest-ever investment in a foreign exchange.

Qatar will retain a 75 percent majority ownership of the Doha Securities Market (DSM) and plans to sell a minority stake in the DSM in a domestic initial public offering within the next three years.

"This partnership lays the foundations for us to build Doha into a world class financial centre," Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr Al-Thani said in a statement.

"Our country's financial markets will be an integral part of a group which links together the world's major trading centers across the U.S. and Europe and now the Middle East," he added.

Western exchanges are looking to boost their presence in booming emerging markets amid a slowdown in European and American economies.

The Doha deal comes as the oil-rich region plays an increasingly active role in exchange consolidation among global stock market operators.

Qatar, with a population of one million and the world's biggest exporter of liquefied natural gas, last September bid for shares in Nordic bourse operator OMX AB and the London Stock Exchange (LSE.L), as Dubai looked to close a $4.9 billion three-way merger with Nasdaq Stock Market (NDAQ.O) and OMX.

Qatar eventually sold the OMX shares to Dubai, and accumulated a 15.1 percent stake in the LSE through its $60 billion sovereign wealth fund, the Qatar Investment Authority.

Dubai now holds 19.9 percent of transatlantic exchange group Nasdaq OMX and 20.4 percent of the LSE.

Under the three-way merger, closed in February, Nasdaq took a 33 percent stake in the Dubai International Financial Exchange, a bourse set up by the Gulf Arab business hub in 2005 to operate according to international standards of accounting and financial reporting.

NEW EXCHANGE

NYSE Euronext and Qatar will build a new cash and derivatives exchange in Doha, adopting the transatlantic bourse's technology, and will also work together to explore further business opportunities in the Middle East.

The new exchange is already seeking to recruit a chief executive officer and other senior officials and has put together a project management team to finalize the scope and timetable for the launch of the new market.

"It's very positive for the Doha Securities Market (DSM) and it comes at a time when the DSM is looking to have relationships with international agencies to upgrade the market efficiency," said Samer Al Jaouni, General Manager of Middle East Financial Brokerage Co.

"Many regional markets are going towards opening the door for derivatives and other alternatives such as marginal trading, but in terms of liquidity and market depth, I think it is very early for Qatar," he added.

The DSM, the main stock market of Qatar, was set up in 1995 and has 43 listed companies with a combined market capitalization of about $136 billion. Non-Qataris have been allowed to invest in DSM-listed companies since 2005.

In February, NYSE Euronext bought a 5 percent stake in Indian commodities exchange MCX for $55 million, while in May NYSE Euronext Chief Executive Duncan Niederauer told a Reuters summit that his exchange was working with Chinese authorities on the feasibility of allowing U.S. companies to list shares in Shanghai.