Satyendra Pathak
Doha
There is an active drive in Qatar to strengthen the domestic debt capital market to diversify sources of funding and expand sustainable finance solutions, QFC Chief Executive Officer Yousuf Mohamed Al Jaida said on Monday.
Addressing the Qatar Financial Market forum under the theme ‘From Sustainable Financing to Debt Capital Markets, Uncovering Solutions for the Future of Banking in Qatar’, Jaida said, “It is a part of a broader strategy to enhance the county’s capital market infrastructure and create a greener future in line with the Qatar National Vision 2030.”
Jaida said, “The banking sector plays a big role in translating sustainability ambitions into reality. By leveraging this power, we can address many environmental challenges we face today. QFC has played an integral part in Qatar’s capital market development journey, and we are proud to collaborate with Bloomberg Intelligence in organising this forum for an open discourse on how we can maximise the financial solutions to advance national sustainability objectives.”
The country is increasingly attracting international investors to its growing equity market, and there is an encouraging potential for local bond and Sukuk issuances, he said.
In general, Jaida said, Qatari issuers have been accessing the international debt capital market since the inaugural sovereign issuance in 2003 of $700 million Sukuk, marking the first-ever sovereign Sukuk issuance from the region.
In 2020, he said, Qatar National Bank issued the first-ever green bonds in the country at a value of $600 million, which represents a remarkable achievement for sustainable financial development in Qatar. In addition, major banks and financial sector stakeholders are launching initiatives that promote sustainable banking and financing.
The forum, a joint effort between the QFC and Bloomberg Intelligence, convened leaders and key stakeholders from private companies, government entities, and financial institutions for a day of dialogue covering consequential topics around bank funding, debt capital markets, and sustainable finance.
Jaida considered the forum an opportunity for open discussion on how to maximize financial solutions to advance the national goals of sustainability, saying that “it will tackle two of the most important topics affecting the banking sector in Qatar, which are the debt capital market, sustainable financing, and environmental, social, institutional governance. These two topics are important for the development of the sector and the transition to a more flexible financial environment and a sustainable economy.”
Jaida added that by 2023, sustainable financing in Qatar is expected to provide investment opportunities worth $75 billion, which indicates the importance to make great efforts to promote the domestic debt capital market, and adherence to the principles of sustainability and environmental, social and institutional governance to meet the growing need for sustainable financing.
The event explored Qatar’s banking funding landscape and strategies to steer the industry toward sustainable and inclusive growth.
It included three presentations, including an analysis of the ‘2023 Energy Outlook’ by Salih Yilmaz, Senior Research Analyst, Bloomberg Intelligence; ‘Health Check on the GCC Banking Sector’ by Edmond Christou, Senior Research Analyst, Bloomberg Intelligence, and ‘Domestic Debt Capital Market in Qatar: Potential and Building Blocks’ by Ayman Doukali, Head of Islamic and Structured Finance, Qatar Financial Centre.
Speaking at the event, Edmond Christou, Senior Research Analyst at Bloomberg Intelligence, said, “Although we have seen lower debt issuance by Qatari banks last year, diversification of the funding mix remains a key area of focus given local lenders’ debt makes up 8 percent of overall liabilities, in comparison to over 11 percent for international peers. Developing a domestic capital market helps banks tap into liquidity and strengthen long-term funding, to support a growing infrastructure pipeline.”
The presentations were followed by two panel discussions themed ‘Developing a Domestic Debt Capital Market and its Impact on the Banking Sector’ and ‘Sustainable Finance and ESG in Qatar’, which covered critical factors that impact Qatar’s financial market and business environment.
The first panel featured Edmond Christou, Senior Research Analyst at Bloomberg Intelligence; Akber Khan, Senior Director at Al Rayan Investment.; Pravesh Malhotra, Head of Investments, Commercial Bank of Qatar; and Ayman Doukali, Head of Islamic and Structured Finance, Qatar.
Their discussion focused on the liquidity position of Qatari banks and its performance based on the dynamics of local and foreign currency funding situation, the challenges impacting the funding environment, the role of a potential domestic debt capital market in improving the Qatari capital market, and other aspects that affect Qatar’s banking sector.
The second panel, which featured Lea El-Hage, Senior Associate, Bloomberg Intelligence; Mohsin Mujtaba, Director, Qatar Stock Exchange, Tahir Pirzada, GM, Group Treasurer, and Financial Institutions, Masraf Al Rayan; Ifzal Nawaz, Head of Financial Institutions Group and Public Sector, HSBC; and Leo Chi Wai Tong, Head of Sustainability, Qatar National Bank, covered the regional and global ESG trends, the ESG/sustainable finance commitments made by Qatari financial institutions, the benefits of green and sustainable financing schemes to the private sector, and the ESG considerations of foreign investors when evaluating investments in Qatar and the region.
Both panels were moderated by Bloomberg Correspondent Simone Foxman.
Bloomberg data shared during the forum highlighted that since 2019, Gulf banks had issued $105 billion worth of debt, but only five percent of which are green bonds, indicating a significant growth potential for green or sustainable finance, especially with the increasing number of organisations adhering to ESG principles.
“Qatar is on the path to developing a more diversified capital market. With established regulations for the governance of existing and new financial investments and continued efforts to adopt comprehensive approaches to capital market development, the country is set to establish a niche sustainable finance market, which is expected to reach a global value of over $22 trillion by 2031,” it said.
