Qatar signs with Euroclear to draw more global investors

• Euroclear link opens bond access
• Boost to liquidity and market efficiency
• Supports Qatar capital-market strategy

Qatar is set to establish a new international settlement link with Brussels-based Euroclear for its local government bonds.

The move will open its domestic debt market to global investors as it seeks to attract more foreign direct investment.

The initiative is expected to boost liquidity, improve market efficiency and deepen international capital flows into Qatar, the Qatari Central Bank and Euroclear said in a joint statement.

It aligns with Qatar’s National Development Strategy 2024-30, which aims to create a more innovative, efficient and globally connected capital market.

The link will allow global investors to access and settle eligible Qatari riyal-denominated conventional government bonds and sukuk (Islamic bonds) through Euroclear Bank, its international central securities depository.

Under the structure, Euroclear Bank will provide international settlement services, while Edaa, Qatar’s central securities depository, will continue to serve local investors.

Qatar’s central bank will remain responsible for issuing the securities and making payments to investors.

Sheikh Ahmed Al-Thani, deputy governor of the Qatar Central Bank, said the collaboration with Euroclear is a practical step towards expanding international access to Qatari government debt instruments.

Further reading:

• Qatar to tap markets for two-tranche debt sale
• Qatar’s lending slowdown since World Cup deepens
• Qatar’s economy shrinks in first quarter after LNG disruption

“By making Qatari government bonds and sukuk Euroclearable, we are helping to simplify market access, enhance liquidity and strengthen Qatar’s appeal to global investors,” said Valérie Urbain, CEO of Euroclear.

Qatar‘s gross domestic product fell to QAR171 billion ($47 billion) in the three months to March 31, a 7 percent year-on-year decline, the state-run National Planning Council reported.

Public borrowing from local banks has fallen by $5 billion since the Iran war began, while private-sector credit has barely grown since the country hosted the 2022 football World Cup.

“Given there’s little economic activity, the allocation of capital has diminished massively,” said Farouk Soussa, a Mena economist at Goldman Sachs in London.

The Gulf state controls the world’s third-largest proven gas deposits, but its exports of liquefied natural gas have been disrupted by the near-closure of the Strait of Hormuz, as well as Iranian missile and drone attacks on its energy facilities