May 17 2011

Qatari bourse to list sovereign bonds

DOHA: The Qatari bourse says it will first introduce government or sovereign bonds as well as state-issued Islamic 'sukuk' as part of its plans to soon introduce bond trading.

"These will be followed, in due course, with the listing of corporate bonds as well," Qatar Exchange has said on its website.

No restrictions will be put on bond trading transactions carried out by foreign investors.

Issuers could, however, put restrictions on investors wishing to trade in bonds by setting out conditions (on the bond issue) at the time of listing, the bourse said.

The proposed move is part of the bourse's continuous service expansion to support the investor community, said the exchange.

Islamic sukuk, like bonds, are also debt securities and have the same structure and purpose as bonds but are issued pursuant to the provisions of the Islamic Shariah.

The aim of a bond issuer is to raise capital, while investors profit through periodic income as well as capital gain.

Unlike equities, bonds carry low risk and bond-holders being lenders (not shareholders as in the case of stocks) are given priority in case of bankruptcy proceedings against an issuer.

The tick size for bonds will be 0.01 percent regardless of the price, and the fee for bond trading are to be charged by the brokers for each trade, whether buy or sell, the QE said.

Daily trading reports will be produced at the end of each daily trading session, and will include a specific section for bond trading activity and prices.

The bourse, however, did not specify the lots in which small investors would be allowed to buy or sell the bonds once they are listed.

© The Peninsula 2011

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