Second Phase of Primary Dealer Framework Records 29 Deals Valued at QR2.8bn: QCB

The Qatar Central Bank (QCB) has achieved significant milestone with the launch of the second phase of primary dealer (PD) framework, recording 29 deals valued in excess of QR2.8bn to date.

About 16% of the primary dealers’ share was redistributed to investors on the first day of issuance, the QCB said on X.

“This activity marks one of the strongest trading performances in the Qatari secondary market, demonstrating strong investor confidence and high demand for Qatari riyal-denominated financial instruments,” the QCB said.

This was accomplished through the development of an advanced infrastructure for trading outside the stock market, significantly enhancing efficiency and transparency in the secondary market under the supervision and oversight of the QCB.

As part of its ongoing commitment to developing the local debt market and promoting Islamic finance instruments, the QCB introduced ljarah sukuk as an alternative to Murabaha sukuk.

This initiative aligns with international standards and enables these instruments to be traded, the QCB said.

Ijarah sukuk have witnessed widespread demand from both Islamic and non-Islamic banks, and have been traded alongside conventional bonds, reflecting growing confidence in Islamic financial instruments and the effectiveness of the new regulatory framework.

The PD frameworks seeks to strengthen the government securities issuance, enhance secondary market liquidity, and build investor confidence with further opportunities for participations in future issuances.

The QCB’s first phase of PD framework, in collaboration with Bloomberg, was aligned with its Third Financial Sector Strategy, which is set to modernise the market infrastructure, enhancing efficiency, transparency, and participation in Qatar’s financial markets.

The QCB has adopted Bloomberg’s auction system to streamline its local currency debt issuance and liquidity management workflows.

The adoption of Bloomberg’s auction system allows local banks to bid for QCB-issued securities directly through the Bloomberg terminal, creating a streamlined and efficient process.

This system supports secondary market trading, enabling banks to offer these securities to clients and strengthening Qatar’s financial ecosystem.

The launch of second phase of PD framework had seen the appointment of local primary dealers: AlRayan Bank, HSBC Bank, Qatar Islamic Bank, QNB and Commercial Bank, marking a key milestone in the development of ongoing capital markets.

The QCB had successfully executed the first auction under the PD framework, issuing local currency government bonds and sukuk, on behalf of the Ministry of Finance.

A total of QR15.43bn was offered and fully allocated across four securities: two year (tap) and five year (new issuance) tranches for both bonds and sukuks.

The PD framework is a foundational initiative to promote deeper and more liquid domestic capital markets. It is designed to build investor confidence, ensure orderly issuance, and enhance the secondary market for government securities. 

The framework is expected to evolve over time, with further opportunities for eligible banks to apply for participation in future phases.