Islamic Finance News
Page 1 of 1
20-Feb-2013
Volume10.Issue07
IFN Reports
Qatar is leading the way
Amjad Hussain
Many people say that these days all roads seem to lead to Qatar. Qatar is seen as leading the
debate in the region across a whole range of issues ranging from politics, global social
responsibility, climate control and now on Sukuk. In a report issued by Ernst & Young in
December 2012, Qatar was ranked second in terms of the number of announced acquisitions in
the region in 2012, with 28 deals totaling US$11.2 billion. A report released by the Oxford
Business Group shows that Qatar issued around 11% of all global Sukuk in 2011, the second
highest (after Malaysia) in terms of value.
It is expected that Sukuk issuance from Qatar will continue to expand in the years ahead; particularly
in light of the estimated US$130 billion in government spending announced from now until 2016. An
IMF report recently suggested that Qatar is likely to issue local currency sovereign Sukuk with three
and five-year maturities this year. The government, however, has not disclosed any specific amounts
or other details of these Sukuk issuances.
Other than sovereign issuances, there is growing appetite amongst government-related entities and
corporates; especially due to the continuing growth in liquidity in the global Islamic finance market. In
March 2012, Qatar Petroleum announced that it was considering a Sukuk issuance, which could be
the first such initiative by a Middle Eastern national oil company.
Qatar Telecom launched a US$500 million 15-year note at 215 basis points (bps) over 10-year US
treasuries in January, as well as a US$500 million 30-year tranche at 162.5 bps over 20-year US
treasuries. Joint lead arrangers of the deal are Qatar National Bank Capital, RBS, Bank of America
Merrill Lynch, JP Morgan and Citigroup. Outside of Qatar, the Government of Dubai has selected
Barwa Bank, Qatar’s fastest growing Shariah compliant bank, as a co-lead manager on a US$750
million Sukuk issuance.
Enterprise Qatar (EQ), the state’s entrepreneurial support body, recently announced the first
Government Procurement and Contracting Program (GPCP). The GPCP is specifically designed to fit
the needs of Qatari SMEs to improve their ability to win business through tenders. To show their
support for the SME sector, Qatar Islamic Bank (QIB), the largest Islamic bank in Qatar, is launching a
new program that will offer exclusive financial benefits, guidance and advice to SMEs. The program
will be known as Aamaly, and is amongst the first tailormade products targeting this sector. QIB’s
commitment to the corporate market was further illustrated recently when it announced the signing of a
QAR800 million (US$219.7 million) financing deal with NBK Holding.
Masraf Al Rayan posted a profit of QAR1.52 billion (US$417.5 million) for 2012, an increase of 7.9%
from the previous year. The board at Masraf Al Rayan is now seeking approval from its shareholders
to acquire strategic shares of an unnamed commercial bank in Libya. Masraf Al Rayan has also
reaffirmed its decision to buy a stake in the Islamic Bank of Britain.
Finally, Qatar is currently carrying out a consultation on the new draft of its commercial companies law.
It seems that the consultation has caused some stir in the local market; especially provisions that
reduce the minimum capital requirement and which reduce the influence of local partners. This is
something which will no doubt unfold for a while yet.
Amjad Hussain is a partner at law firm K&L Gates’ corporate and finance practices. He can be
contacted at Amjad.Hussain@klgates.com .
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08/04/2013