Move aims to spur investment in government debt instruments by commercial banks, other institutions
Qatar has completed procedures to list government debt instruments for trade on its securities exchange, aiming to stimulate investment in them by commercial banks and other institutions, the central bank said on Monday.
Trade in short-term Qatari Treasury bills will begin on the Qatar Exchange this Thursday, central bank governor Sheikh Abdullah bin Saud Al Thani said in a statement, with trade in government bonds and sukuk [Islamic bonds] to start "at a later stage".
Listing Qatari government bills and bonds on an exchange, rather than limiting trade to opaque over-the-counter dealings between banks, could make their secondary market prices more transparent and stable, increasing trading activity.
A more active debt market could in turn encourage companies to issue more bonds, reducing their reliance on bank lending, which has been hurt even in the wealthy Gulf region by jitters over the euro zone debt crisis.
"The secondary market in bonds will encourage companies to issue debt instruments and will boost liquidity on the stock market of Qatar," the central bank statement said.
Since May the central bank in Qatar, the world's largest natural gas exporter, has been issuing about QR2bn ($550m) worth of T-bills monthly with maturities ranging from three to nine months, to drain excess funds from the banking system and help create a domestic yield curve. Qatari banks held about QR8bn of T-bills at the end of September.
Qatar has been preparing steps to deepen its debt market for many months, but has proceeded cautiously. In March, the Qatar Exchange's chief executive Andre Went said the bourse was considering whether to allow trading of bonds by the second quarter of this year, and would start with trading of government debt before slowly moving to corporate bonds.