Qatar yesterday proposed the creation of a single GCC stock market to attract capital, activate growth and support a drive for economic integration among members.

Dr Ghanem Al Hamadi, director of the Doha Securities Market, made the proposal at a capital market conference in Abu Dhabi, where stocks officials and experts from most regional countries were present.

He said a common stock market in the six-nation GCC has become essential as the entire world pushes ahead with globalisation and removal of economic, trade and investment barriers.

"In such conditions, economic unity in the GCC has become imperative to face the challenges arising from globalisation and openness," he said.

"Creation of a unified GCC bourse capable of attracting funds on the local, regional and international levels should now be a priority given the fact that most GCC countries have small stock markets which make them less competitive."

Hamadi's ideas involved the establishment of a "strong and efficient" GCC bourse that should be "open for all and free from any obstacles or restrictions.

"It should guarantee free and smooth flow of funds and ensure fair dealing for all. It should constitute a main channel for the movement of capital within the region and attracting foreign investment which is needed to support our economies."

The GCC states have frequently floated the idea of a common bourse but the project has been held up by the disparity of trade and corporate laws in member states. Although some members have already allowed cross-listing of shares, only a handful of companies have joined in. Other members have yet to permit non-nationals to own shares.

But experts believe the project is now closer to reality after GCC heads of state endorsed plans last month for setting up a customs union next year. The much-delayed project will pave the way for the long-sought currency union and common Gulf market which was stipulated in the 1982 economic pact.

Brokers said linking GCC stock markets would largely boost dealing that has remained relatively dull in the absence of foreign trading and speculation in most bourses.

"The establishment of a unified GCC stock market should support efforts to achieve economic development, increase trading, facilitate the flow of capital among member states, develop investment products and services in the region and lay the foundation for a financial and economic merger in the GCC," Hamadi said.

"Particular objectives should include: boosting the competitiveness of the GCC markets in the field of attracting capital from Gulf and other countries, increasing liquidity in the markets, upgrading accuracy and transparency, and diversification of investment instruments."

He stressed the success of such a project hinged on the creation of a "stable political climate, flexible and similar economic and financial policies, and the right investment environment, advanced financial base, and stable exchange rates.

"The establishment of a joint GCC stock market should become the main goal of member states. To achieve that goal, we should remove all legal, technical and procedural hurdles within a defined timetable based on a realistic groundwork that takes into account the conditions of each member. The success of this project will form a nucleus of the greater Arab stock market."