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The State of Qatar and NYSE Euronext Announce Major Strategic Partnership


Doha / New York / Paris.- The State of Qatar and NYSE Euronext (NYSE Euronext: NYX) today announced a strategic partnership which will transform the Doha Securities Market (“DSM”) into a significant international player in the global exchange space and provide NYSE Euronext with a valuable presence in the Middle East. The closing of the transaction is expected to take place early during the fourth quarter of 2008, subject to the completion of documentation and obtaining non-objection from regulators.


* Strategic relationship between the State of Qatar and NYSE Euronext to build a new, internationally integrated cash and derivatives exchange in Doha with direct links to the know how and technology skills of the world’s largest capital markets;

* Interests of both the State of Qatar and NYSE Euronext therefore fully aligned through equity participation, technology integration and market structure harmonisation. As part of this agreement, both parties commit to work together as partners to explore other opportunities in the Middle East;

* NYSE Euronext to purchase a 25% stake in the DSM for US$250 million in cash, the largest investment ever made by NYSE Euronext in a foreign exchange. In all respects, NYSE Euronext submitted the most attractive offer as part of a competitive bidding process;

* NYSE Euronext to receive three of the eleven seats on DSM’s board of directors;

* The State of Qatar to retain ownership of the remaining 75% of the DSM through the Qatar Investment Authority;

* The partnership lays the foundation for a fully diversified financial market in Doha
o leveraging on NYSE Euronext technology and product expertise to enhance Doha ’s existing cash equities business;
o providing a platform for derivatives trading and related post-trade services;
o governance and transparency levels of the new DSM to meet best practice standards of international exchanges.

* NYSE Euronext has been selected as the technology provider by the State of Qatar and the DSM for both the cash equities and derivatives markets;

* NYSE Euronext to act as a partner managing the operation of the new exchange, including the appointment of the senior management team, and providing technology services.

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:

“This represents a hugely significant development for Doha ’s financial markets, for the people of Qatar and for the Middle East . We are delighted to partner with NYSE Euronext which has a global reputation for excellence. It’s a significant endorsement of Qatar ’s importance in the world’s capital markets and will provide considerable opportunities for our future generations. This partnership lays the foundations for us to build Doha into a world class financial center. Our country’s financial markets will be an integral part of a group which links together the world’s major trading centers across the US and Europe and now the Middle East.’’

“Today’s announcement represents the cornerstone of Qatar’s vision to bring our entire economic infrastructure up to the highest international standards, thereby laying the best possible foundations for the development of this dynamic nation.’’

Duncan Niederauer, Chief Executive Officer of NYSE Euronext, said: “On behalf of our Board and all my colleagues at NYSE Euronext, I welcome this mutually beneficial strategic partnership with the State of Qatar and the Doha Securities Market. It is a great privilege to align NYSE Euronext with Qatar and Doha ’s financial marketplace, whose role is increasingly important in the Gulf region and globally. We are greatly appreciative to His Excellency Sheikh Hamad bin Jassim bin Jabor Al-Thani, His Excellency Yusof Kamal, Dr. Hussain Al-Abdulla and the entire leadership team of the Doha Securities Market for this exciting opportunity, which complements our strategic business goals and benefits our shareholders.”

Added NYSE Euronext Deputy CEO Jean-François Théodore: “We share the entrepreneurial vision of Qatar and the Doha Securities Market. Our leading technology, focus on innovation and proven expertise will contribute greatly to the development of a world-class marketplace. In addition to proving beneficial to the people and business community of the Middle East, Europe and the United States, this partnership will serve to strengthen the global capital marketplace.”

The Strategic Partnership
The strategic partnership between the State of Qatar and NYSE Euronext will transform the DSM into an internationally integrated 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.

Under terms of the agreement, NYSE Euronext has agreed to purchase a 25% stake in the DSM for US$250 million in cash, the largest participation NYSE Euronext has taken in a foreign exchange. NYSE Euronext will be responsible for providing management services and technology. It will assist in identifying enhancements to the structure for the management of the exchange.

In addition, the collaboration is expected to benefit Qatar with significant intellectual knowledge transfer as NYSE Euronext has undertaken to base a number of its growing Middle East region operational and technology support functions in Doha. As a result, Doha will become a business hub for NYSE Euronext in the Middle East.

The objective of the partnership is to develop Qatar’s financial markets to best practice international standards, linking the DSM with the world’s most important liquidity centres in the US and Europe.

Qatar is expected to be the second-largest economy in the region by 2015. Combining the liquidity and innovation of the DSM with NYSE Euronext, an integrated international exchange offers significant potential for the introduction of new trading products and international members.

A project management team has already been put together to finalize the scope and timetable for the launch of the new market, which will include cash equities, derivatives and other commodity-based trading products and will be adopted by the new DSM board.

Under terms of the agreement, the new venture will adopt NYSE Euronext technology for both cash equities and derivative markets.

The trading currency will be the Qatari Riyal, although it is expected that there will be capabilities to list multi-currency instruments.

The immediate focus for both partners will be to install the optimum management team as quickly as possible. Recruitment of the CEO and other senior officials is already underway.

The new exchange will be working with Qatar’s financial regulators to finalize the necessary governance and transparency requirements to ensure DSM conforms to best practice international standards. A further objective of the partnership is to enhance the process of ongoing regulatory reform which is redefining Doha ’s financial market and to act as an active partner with the new regulator.

Extensive cooperation will continue across all issuers and investors to develop a portfolio of trading products and initiatives across both equities and derivatives which will develop to best possible effect the liquidity within the Doha market.

Further details of the above process will be made public when appropriate. The State of Qatar, however, views it as important to be able to allow the country’s citizens to benefit directly in the success of this initiative and plans to sell a minority share stake of the DSM in a domestic IPO. The IPO process will be undertaken within the next three years.

In addition to cash equities and derivatives, the DSM also intends to enhance the post-trade infrastructure in Qatar in line with international standards. The DSM will continue in the short-term with its vertically integrated clearing and settlement model, although the exchange intends to link up with international clearing and settlement houses as the partnership progresses.

Both parties are committed to upholding the existing core values of the Doha market: a commitment to transparency, liquidity and fairness.


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