QFCA CEO, SHASHANK SRIVASTAVA
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bank notes
Qatar to offer sovereign bonds
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he International Monetary Fund (IMF) revealed that Qatar plans to issue local currency sovereign bonds with three- and five-year maturities this year as part of its efforts to build a yield curve for its debt market. “They did not mention the timing of the issuance, but there will be more than one issuance and the objective is to build a domestic sovereign yield curve,” said Ananthakrishnan Prasad, the IMF’s mission chief for Qatar. He said the government did not disclose any specific amounts or other details of the bond sales to the IMF, which concluded regular consultations with Qatar earlier in the month. The bond issues could be a big step forward in Qatar’s efforts to attract investment to its debt market, helping fund its massive infrastructure-building plans. Qatar issued local currency bonds in January 2011 when the Qatar Central Bank issued a QR50 billion ($14 billion) three-year bond directly to local banks as a step to drain excess money from the banking system. “These bonds were one-off issuances, and there has been no secondary market trading. Now they want to build the domestic bond yield curve, so the new issuances will be tradable instruments,” Prasad explained.
Doha Bank extends its 0% loan offer
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oha Bank has extended its 0% personal loan offer, launched in 2012, for an additional three months. The personal loan offer aims to give consumers the flexibility of consolidating their existing loans and transferring them to Doha Bank at reduced rates and smaller installments. Dr R. Seetharaman, Doha Bank Group CEO, said: “This is the best time for Doha Bank’s new and existing customers to benefit from this extended offer for another three-month period. It gives people the ability to further expand their investment horizons and commit to assets and projects that will be beneficial to their families and lives. For those who have already leveraged their loan eligibility, this is also a good opportunity to take a breather and defer some payments while benefiting from an initial interest-free period that can prove invaluable to their overall financial health.” Meanwhile, Seetharaman was honoured with the prestigious title of Distinguished Fellow of the Institute of Directors (IoD) at the 23rd World Congress Leadership and Quality of Governance and Presentation of Golden Peacock Awards. The event was hosted by the IoD at the Lalit Ashok hotel in Bangalore last month.
QFC relaxed on Islamic Finance tax
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he Qatar Financial Centre (QFC) and Turkey have the most Islamic financefriendly tax systems out of eight countries in the Middle East and North African (MENA) region. Phase 1 of a study sponsored by QFC, in partnership with the Washington, DCbased International Tax and Investment Centre, showed that while simple Islamic finance transactions can be carried out in some countries without prohibitive tax costs, of the countries reviewed only Turkey and the QFC have a tax system that enables sukuk transactions to be carried out without excessive tax costs. The study examined two alternative approaches a country can take to update its tax system to support Islamic finance transactions, and concluded by recommending the one that is adopted in Malaysia as being quicker and simpler to implement for Muslim-majority countries. Ian Anderson, Chief Finance and Tax Officer at the QFC Authority, said: “Islamic finance is of growing importance within the region, but the taxation systems of almost all MENA countries were developed in an environment of conventional finance. This too often means that Islamic finance suffers an additional and unfair tax burden not borne by conventional finance. This report points out the best way forward to help level the playing field.”
AJF signs Murabaha agreement Al Jazeera Finance (AJF) signed a $95 million (QR345.8 million) three-year dual currency Murabaha facility with a syndicate of banks from the GCC, its first syndicated financing transaction. Murabaha is a particular kind of sale, compliant with Sharia law, where the seller expressly mentions the cost he has incurred on the commodities for sale and sells it to another person by adding some profit or mark-up thereon which is known to the buyer. QInvest acted as Sole Bookrunner and Structuring Advisor to AJF. Qatar Islamic Bank (QIB) took the Mandate Lead Arranger (MLA) role and is also acting as the Investment Agent. Ahli United Bank, First Gulf Bank UAE and QInvest were the Lead Arrangers.
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MARCH 2013