Qatar Exchange remains upbeat on MSCI upgrade hopes

Qatar's Stock Exchange has said it understands why it failed to persuade MSCI to reclassify it from frontier to emerging market status. It said in a statement that the MSCI review was "understandable in view of the fact that no changes have yet been made to foreign ownership limits". Index provider MSCI on Wednesday maintained the UAE and Qatar as frontier markets, once again delaying a much-awaited promotion of the Gulf states to emerging markets status. Both countries remain up for a possible upgrade in June 2012, as part of MSCI's annual market classification review, the company said in a statement posted on its website. A spokesman for the Qatar Exchange cited the positive steps taken by it and the regulators in Qatar to meet the criteria set by MSCI. "Although we would have been happy if the reclassification has been achieved, we remain confident that the Qatari market will continue its drive towards success motivated by the strong economy of the State of Qatar and the favourable performance of the companies listed on the exchange," the spokesman said. "This year, QE is expected to be the best performing market in the region and one of the best dividend paying markets globally," he added. The UAE's main markets fell more than 1 percent and Qatar ended lower on Thursday after the bourses failed for the third time to gain emerging market status. MSCI, which had already denied a promotion to the UAE and Qatar in 2009 and 2010, cited investor concerns on the effectiveness of a new delivery-versus-payment system, or DvP, at some of the bourses. Stringent foreign ownership limits in Qatari stocks was also an impediment, it said.