x Abu Dhabi, UAEThursday 18 January 2018

Qatar to list treasury bills to develop its debt markets

Qatar allows listing of treasury bills on the country's exchange and prepares for its first issuance later this week, in a move expected to help the development of the country's debt markets.

Qatar is to list treasury bills on the country's exchange this week, leapfrogging ahead of Gulf rivals in the country's efforts to develop its debt markets.

The Qatar Central Bank approved the listing of treasury bills on the Qatar Exchange and plans to allow the listing of government bonds at a later stage.

The aim is to eventually provide a secondary market for treasury bills for banks and other investors, the Qatar Central Bank said in a statement released yesterday.

The move would help to increase "the diversity of investment tools for investors", the statement said.

The first treasury bills are to be listed on Thursday.

Qatar joins a number of regional exchanges seeking to develop their bond markets.

Qatar was picking off the "low-hanging fruit" in moves towards a more sophisticated debt market, said Mohammed Dawood, the managing director of global capital financing at HSBC Middle East. "It could be that this is more of a positioning play by the Qatar Exchange to attract regional listings," he said. "The starting point here is using existing securities and treasury bill listings by the government as a base to promote more issuances within Qatar."

T-bills are one of the pieces needed for the development of a yield curve for government debt, composed of short-term to long-term securities.

Development of this would allow other Qatari companies to come to market with debt sales more easily, said Mark Watts, the head of fixed income at the National Bank of Abu Dhabi.

"Qatar is at the forefront of developing a liquid, full curve for its paper," he said. "The fact that they're doing this issuance means another gap is being filled in."

No government in the Gulf has developed a yield curve, with only Egypt and Turkey having developed the necessary market infrastructure. Qatar raised US$5bn (Dh18.36bn) from a bond sale at the end of last month, the biggest issuance from a government in the Gulf this year.

Currently, bond sales by governments of Gulf countries typically take place on the London or Luxembourg stock exchanges.

The UAE Government has made no decision on pending plans for sales of federal bonds next year, Zawya Dow Jones reported this month.