Qatar Holding and NYSE Euronext sign formal terms to set up strategic partnership

The State of Qatar launches “Qatar Exchange” as it signs formal terms of strategic partnership with NYSE Euronext - Qatar Holding and NYSE Euronext sign formal terms to set up strategic partnership - NYSE Euronext to acquire 20% of the new Exchange for US $200 Million - New venture to be called “Qatar Exchange” - Trading systems to be transitioned to NYSE Euronext’s state-of-the-art technology - New Board and Chief Executive appointed

19/06/09

Qatar Holding (“QH”), the strategic and direct investment arm of Qatar Investment Authority (“QIA”), and NYSE Euronext (NYX) today announced the signing of binding agreements to form a major strategic partnership which will establish Qatar Exchange (successor to the current Doha Securities Market (“DSM”)) as a world-class international exchange, and provide NYSE Euronext with a valuable presence in the Middle East.    The successful closing of negotiations follows a preliminary announcement on 24 June 2008 that Qatar had selected NYSE Euronext as a partner.

Highlights                                                                                              

  • The binding agreements represent the formal closing of negotiations to enter into a strategic partnership between the State of Qatar and NYSE Euronext;

     

  • NYSE Euronext is taking a 20% stake in QE for US $200 million, the largest investment ever made by NYSE Euronext in a foreign exchange;

     

  • QIA to retain 80% of QE through its strategic and direct investment arm, QH. The new exchange will be overseen by a newly appointed board, to be chaired by His Excellency Dr Khalid Al Attiyah;

     

  • All staff currently employed by DSM are to be transferred to QE with the same employment rights and status;

     

  • Andre Went, a senior leader from NYSE Euronext with 20 years experience, to be appointed as Chief Executive Officer of QE.

   Under the terms of today’s agreements:

  • QE to start trading under new name and management from 21 June 2009 .  There will be no immediate changes to the existing DSM market practices. All future changes will be communicated in advance to all market participants;

     

  • Work to commence on transitioning QE to NYSE Euronext’s next-generation trading technology; QE will be the first exchange outside of the NYSE Euronext family of exchanges to utilize Universal Trading Platform (UTP). UTP is the same system operating NYSE Euronext’s European cash markets and being rolled out across all of NYSE Euronext’s cash and derivatives markets globally;

     

  • State-of-the-art technology systems position Qatar as the natural trading hub in the GCC region;

     

  • NYSE Euronext provides services and technology to QE, and will take three of the 11 seats on the QE board of directors; six directors will be appointed by QIA and two directors will be independent;

     

  • In addition to the technology changes, QE will work with the regulators and the market participants to diversify the products traded on the exchange and to continue implementing international standards.

Commenting on today’s announcement, His Excellency Sheikh Hamad bin Jassim bin Jabor Al-Thani, Prime Minister and Minister of Foreign Affairs of Qatar, said:

“Today’s announcement 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 .

“These international markets may be facing uncertain times today, but our focus remains on what the opportunities may be tomorrow for our people and indeed the generations to come. I am delighted, therefore, that we have entered this partnership with NYSE Euronext to help drive forward this ambitious project. This agreement will play an important role in securing the future of the State of Qatar.”

Ahmad Al-Sayed, Managing Director and CEO of Qatar Holding, said:

QH is continuously growing its portfolio of strategic and direct investments for the benefit of the State of Qatar. This latest strategic venture will allow Qatar ’s financial markets to run on state-of-the-art technology systems. Technology and market know-how transfer opportunities will greatly enhance our knowledge and help generate more high value employment opportunities for our people. When our stock exchange starts trading on Sunday as the Qatar Exchange, it will truly be the start of a new era.”

Duncan Niederauer, Chief Executive Officer of NYSE Euronext, said:

Our strategic partnership with the State of Qatar will benefit the Gulf region and customers on a global scale. Our world-class technology, leadership and expertise in the marketplace will complement the strong foundation and vision of our partners.  On behalf of my colleagues, I extend special thanks to His Excellency Sheikh Hamad bin Jassim bin Jabor Al-Thani, and the Government of Qatar, Qatar Investment Authority, Qatar Holding, Qatar Financial Markets Authority and the entire leadership team of the Doha Securities Market for moving forward on this exciting initiative.”

The Strategic Partnership
Today’s announcement confirms the strategy behind the partnership between the State of Qatar and NYSE Euronext as set out in the preliminary announcement issued by both parties on 24 June 2008 . The intention of the strategic partnership is to transform the QE into an internationally recognized exchange. It will provide Qatar with total market infrastructure capability and the opportunity to reinforce the country’s position as a regional capital market with the introduction to Doha of new trading products, technology and international investors and issuers.

The benefits of the partnership will extend beyond the international development of the QE, as NYSE Euronext has committed to use Doha as its Middle East operational and support hub. Furthermore, both the State of Qatar and NYSE Euronext have committed to work together in partnership to develop other opportunities in the Middle East region.

The terms of the agreements are intended to align closely the interests of both partners to the success of the project. It provides the State of Qatar with a means of developing a sophisticated global market to provide issuers and investors an exposure to the success of its economy which continues to grow despite the global downturn. By 2015, Qatar is expected to be the second-largest economy in the GCC region which underlines the rationale behind the country’s role as a major regional capital market. It offers NYSE Euronext the exposure to one of the world’s fastest growing regions.

Management
Having now successfully closed the negotiations between both parties with the signing of the agreements, the partners are in a position to take forward the objective of developing Qatar ’s financial markets to best practice international standards.

The Board of QE will be chaired by His Excellency Dr Khalid Al-Attiyah, State Minister for International Cooperation and the Acting Minister for Business and Trade.   Mr. Ahmad Al-Sayed, Managing Director and CEO of Qatar Holding, will be Vice Chairman.

QE’s Chief Executive Officer will be Andre Went, who previously served as a Managing Director based at NYSE Euronext in Amsterdam. Other roles in which he served during more than 20 years in the Euronext group include Director Strategy and Market Development Director Group Policy, Euronext Paris, and head of Secondary Markets in Amsterdam.

"I am honored by the confidence the State of Qatar has shown by giving me the opportunity to lead its national stock exchange with the goal of becoming an even more successful, international marketplace,” Mr. Went said. “I very much look forward to working with the Board and the QE management and staff and to begin making these great ambitions a reality."

The new market will begin trading as QE under the new management structure on 21 June, 2009 . All staff employed by the DSM will be transferred to QE and will continue to enjoy the same employment rights and status.

The aim of the management is to build on the achievements of the DSM, creating a world class exchange trading cash equities and derivatives. Trading will continue to be in Qatari Riyals with longer term plans for multi-currency functions.

Technology
The objective of the management is to run the market using NYSE Euronext technology and transform the market structure within two years.

This will involve QE utilizing NYSE Euronext’s SFTI network. SFTI provides a fast and secure communication network infrastructure.

Within the next 12 to 18 months, QE will transition to NYSE Euronext’s Universal Trading Platform. The QE platform will connect with SFTI.

Regulation
QE will liaise closely with the Qatar Financial Markets Authority and all other relevant authorities over plans to move towards world class disclosure, transparency and investor protection standards in the Qatari markets. 

For further information, please contact:

For Qatar Holding and Qatar Exchange:

Citigate Dewe Rogerson                                                +974 452 8335 (Doha office)

                                                                                    +44 207 638 9571 (London office)
Patrick Donovan                                                                      

Toby Moore

Seb Hoyle

Angharad Couch

For NYSE Euronext:

  1. Media: Rich Adamonis 212-656-2140, radamonis@nyx.com
  2. Media: Caroline Denton, +33 1 49 27 1074, c.denton@euronext.com
  3. Investor Relations: Stephen Davidson, 212-656-2183 s.davidson@nyx.com