Qatar Exchange will publish rules approving margin trading in the next few days, its chief executive said on Wednesday, a tool intended to deepen liquidity on the bourse.

Margin trading involves investors borrowing money from a broker to purchase stock.

"Margin trading will increase liquidity. It's very important for investors as they've been asking for it for some time," Rashid al-Mansoori told Reuters in an interview on the sidelines of a financial conference.

"We received approval from the regulator for margin trading and will publish it [the rules] on the website this week or next." It was unclear if margin trading would be allowed straight away or in the future.

Regulated margin trading has been allowed in UAE since 2012 and Oman since 2013, although Gulf states have been reluctant to introduce such products because of the risk that retail investors -- who dominate trading -- will build up significant positions using loaned cash and then struggle to cover them when the market turns negative.

While not the most illiquid stock market in the Middle East, Qatar struggles to generate significant trading volumes, a problem exacerbated by large government holdings in many companies.

On Wednesday, Qatar's benchmark index traded 8.2 million shares. By comparison, markets in Dubai and Abu Dhabi, which are also constituents of the MSCI Emerging Markets index, traded 187.9 million and 69.8 million shares respectively.

Mansoori also said he expected two initial public offerings on the Qatar bourse in 2016. This follows a barren period for the exchange, which has seen one listing since 2010.

His comments follow on from Qatar First Bank saying on Dec. 6 it planned to list its shares on the Qatar exchange as early as the first quarter of 2016.

Mansoori said there was one other bank that would also launch a share sale in 2016, but he declined to name it.-Reuters