I'm told the duty-free shopping in the Middle East is excellent, but NYSE Euronext 's (NYSE: NYX) shopping trip to Qatar is all about business. The company (a Motley Fool Rule Breakers recommendation) announced Tuesday that it is acquiring 25% of Qatar's Doha Securities Market for $250 million and that it will build the exchange a new cash and derivatives market based on its technology.

The race for a modern financial center
Gulf states, buoyed by soaring oil revenues, are locked in a race to create a modern, regional financial center, which requires a vibrant capital market. At the end of last year, Qatar made a play for Nasdaq's stake in the London Stock Exchange, which was eventually won by Dubai in a complex deal that left the emirate owning 20% of Nasdaq OMX (Nasdaq: NDAQ).

Although Nasdaq OMX publicly touted the benefits of the tie-up with Dubai, I think its main motivation for the deal was to secure the acquisition of OMX, which Dubai was initially competing for. That's quite different from NYSE Euronext's pro-active purchase. Although it may end up looking prescient over the course of time, it's far from clear that the Middle East can support the activity level to justify NYSE Euronext's involvement now or even within the next 5-10 years.

An entire stock market worth less than Apple Inc.
Qatar's economy remains heavily dependent on energy: Oil and gas revenues represented 56% of GDP in 2007. Where is the Qatari Oracle or Procter & Gamble ? The total traded value on the Doha Securities Market today was $179 million -- that's less than the value of Apple (Nasdaq: AAPL) shares traded during an average 20-minute period on U.S. markets.

All the same, there are some positive signs: Qatar's non-oil and gas sectors are growing faster than oil and gas, with an expected real growth rate of approximately 9%-10%. Sectors that have benefited strongly from oil windfalls include financial services, real estate, and infrastructure. Citigroup (NYSE: C) sees promise in the region -- it's transferring one of its co-heads of investment banking to Dubai. Finally, NYSE Euronext wasn't alone in pursuing Qatar; it beat out the London Stock Exchange in a competitive bidding process to provide the technology platform.

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