Business & Finance Club Magazine - Finance Sector - Qatar -- The QR10bn bond issued by the government recently is the ‘best investment’ for local banks, al khaliji chairman Sheikh Hamad bin Faisal al-Thani  has stated.

“The bond carries a coupon of 6.5%, which is really good. That the local banks have keenly participated in the bond issue underscores this,” Sheikh Hamad said yesterday.

He said the bonds provided ‘extra liquidity’ for the local banks. “The local banks also benefit from the bond being based in riyal. Had it been based in dollar, I don’t think it may have elicited so much interest as it is now,” Sheikh Hamad said.

He said the government’s decision would also help develop the bond market in Qatar. The bonds are expected to be listed on the Qatar Exchange (QE) later this year. “It is the first time that a bond is being listed on the Qatar Exchange. It will definitely help support the Qatar Exchange. In future, we may see more of this,” Sheikh Hamad said.

The eight-year issue is evenly split with five local conventional banks getting QR1bn riyal each while four Islamic banks shared the rest.

The bonds provide a new vehicle to pool excess liquidity in the banking sector and diversify its funding away from dollars.