Qatar bourse caps brokerage discounts
Doha, April 22, 2013
Qatar has limited the size of discounts that stock brokerages in the country can offer their customers, in a move that could reduce short-term speculative trading in shares.
The Qatar Financial Markets Authority (QFMA), the regulatory body for the stock exchange and 11 brokerage houses, has issued a circular saying brokerages can cut their commissions by a maximum of 50 percent, a QFMA spokesman said on Monday.
He did not comment on the motive for the rule, but analysts said it might be to reduce the range of discounts offered by different brokerages.
"It could be to level the playing field among brokerage houses. Brokerage houses were deeply discounting to gain market share," said Ahmed Shehada, head of trading at QNB Financial Services.
He also said the decision might reduce speculation in the market. "Most of the speculators were getting discounts, so they may clear out now since it will be that much more expensive for entry and exit."
Shehada added that the rule would not significantly hurt liquidity in the market, however. "I think it might be reduced slightly, but not significantly." – Reuters