Qatar Central Bank revives monthly auction

06 April 2016

Move signals liquidity squeeze is easing

Qatar Central Bank (QCB) has issued QR1.5bn ($412m) in treasury bills for the first time in 2016, it has stated.

It cancelled three monthly auctions of three-, six- and nine-month bills in the first quarter of 2016, after banks’ appetite fell and yields rose sharply.

The April auction was oversubscribed by 36.7 per cent, and yields fell to 1.31 per cent for three-month bills.

Results of QCB treasury bill auctions  
 Auction date Maturity (months)Size (QRm)Offers (QRm)Yield (%)
 5 April 20163550850 1.31
 5 April 2016550 650 1.27
 5 April 2016400 550 1.38
1 December 20155009501.48
1 December 2015250 5501.75
1 December 2015250 450 2
1 April 20152,0003,4800.93
1 April 2015 1,0001,5301.07
1 April 201591,0001,3601.20
QCB=Qatar Central Bank. Source: QCB

This compares with a yield of 1.48 per cent on three-month bills in QCB’s most recent auction in December. This had risen from 0.93 per cent yields on 3-month bills in April 2015. This was widely thought to be a sign of falling liquidity in the Qatari banking sector.

Several Qatari banks have since issued local currency bonds to boost their capital adequacy ratios.

Al Khalij Commercial Bank issued QR1bn in perpetual tier-1 bonds in March. Commercial Bank of Qatar issued QR2bn in additional tier-1 capital in late February.

Ahli Bank is currently marketing a five-year bond, according to UK news agency Reuters, while Qatar National Bank (QNB) is seeking a $1.7bn syndicated loan. Qatar International Islamic Bank (QIIB) announced a QR1bn tier-1 sukuk (Islamic bond) in March.

Doha-based bankers tell MEED they are being very selective on new lending as they focus on bringing loan-to-deposit ratios under control.

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