Qatar continues capital and domestic debt market development

Qatar2022Qatar is continuing to issue bonds and sukuks to develop its capital market and deepen its domestic debt market in the run-up to the 2022 FIFA World Cup. In its latest action, more than $6,6 billion in local currency will be offered in bonds and sukuk. This is the first time Qatar issues such an amount. The highest used to be 2011’s $3 billion issued by the central bank and will come due this week.
Mohammad Ghiyath Sheikhah, first manager for international investment and finance at Doha-based Qatar International Islamic Bank, believes that Qatar is on the right track because “small amount does not make sense” in creating and establishing a local currency debt market. He applauded the initiative and leading role being played by the government.
Authorities in Qatar are busy with projects related to the organization and the hosting of the 2022 world cup. The preparations for the event are pushing the country to quickly implement its plans. The government and companies are expected to invest $138 billion by 2016. The domestic market is estimated to be unable to satisfy their demands. Amol Shitole, a credit analyst at SJS Markets Ltd said a “diversified mix of financing” should be implemented as part of a strategy to the fall of oil prices or government revenues.
Qatar is the world’s largest liquefied natural gas exporter. It occupies a significant place in the government’s coffers. Ahmad Shehada, head of trading at Qatar National Bank Financial Services, said the $6,6 billion bonds and sukuk is designed to develop “the debt curve and giving foreigners greater access to riyal debt”. Foreign interest has been slowly developing as Qatar becomes the most active local debt market in the Middle East after Saudi Arabia.

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