Bonds

Bonds are public debt instruments (Securities) binding the borrower (or issuer) to pay fixed amounts (so-called Coupon) in consecutive intervals to the lender. These coupons represent the interest on the borrowed money.

 

  Bond Brochure: please click here to view.
  Introduction to Bonds and the Bond Market: please click here to view
  Presentation on Bonds: please click here to view.

 

 

Treasury Bills

Treasury Bills (TBills) are debt securities which are issued by the Central Bank as a monetary policy tool used principally to regulate the money supply and influence prevailing interest rates. They are classified as short-term debt securities as the maturity dates of each issue are almost exclusively one year or less. Issues are usually made on a regular basis (monthly) and with standard maturity periods of either three, six or nine months. TBills are widely regarded as the least risky investment available to investors.

Initial issues of T Bills are made to the primary market, which is made up exclusively of the local banks, and is completed via an auction. The TBills are issued by the Central Bank to the primary market members at a discount to their par value, meaning they have no coupon or interest rate, and do not pay interest prior to the maturity date. The primary market members then make the securities available for purchase by investors in the secondary market. The issuer or seller will receive the discounted amount from the purchaser, which is equivalent to the book or settlement value (Price * Volume)of the securities issued or sold. On the maturity date, the holder of the bills will receive the par value of the TBills from the Qatar Central Bank. The difference between the issue or purchase price and the par value is the investment return.

 

  A Presentation on Treasury Bills: please click here to view.
  Introduction to Treasury Bills & the Treasury Bills Market: please click here to view

 

 
 
 
 

Margin Trading

QFMA issued margin trading rules on September 10, 2014. Subsequently, Qatar Stock Exchange and Qatar Central Depository issued their rules for margin trading and published them on their websites. Members Shall not engage in margin trading activity before obtaining a license from QFMA in accordance with the conditions and requirements contained in the rules. The QSE shall ensure the compliance of Financial Services Company with the provisions of the rules, and shall inform QFMA of any violation. Investors are kindly requested to read carefully margin trading rules and related procedures to make sure that their investment decisions based on full awareness and understanding of the benefits and risks associated with trading on margin.

Important Definitions

A transaction or transactions, whereby a Financial Services Company pays a percentage of the securities' market value purchased for its client pursuant to the Agreement governing the relation between them.
The allowed amounts of money or securities deposited by the client in the Margin Trading Account at the Financial Services Company in accordance with the percentage determined in the Margin Trading Agreement in relation to the securities' market value to be traded via Margin Trading before the purchase process.
The minimum limit determined by the Authority for the client's contribution in the market value of the securities in the Margin Trading Account at any time after the purchase date.
A designated client account held at a Financial Service Company for the purpose of Margin Trading.
The client's account, which is opened directly by the Financial Services Firm on the Qatar Central Depository Securities systems, this account may not be used in any activity other than the Margin Trading Activity. It is not permissible to open more than one Margin Trading Account per person at more than one Financial Services Company.

Margin Requirements

30%
60%

0
Maintenance Margin 
0
Initial Margin
 

Margin Trading Agreement Minimum Requirements

Definition of Margin Trading.

Statement on client's responsibility to obtain prior advice and understand the risks of margin trading, which include the following:

  • Possibility of client losing part of whole of the funds deposited in the margin trading account.

  • The right of the Financial Services Company to sell part of the securities purchased on margin in the event of the decline of the maintenance margin proportion less than the limit specified by the Agreement and the failure of the client to cover the shortfall in the maintenance margin within the period specified by the notice on the maintenance margin shortfall replenishment, provided that the securities may be sold to yield the best interest for the client.

A statement that the client’s securities and cash balance kept in the margin trading account and other collaterals are a guarantee to pay the amounts owed by the company to the margin trading account.

A statement providing that the client has the right to receive dividends and interest when due, and vote in the general assemblies of the companies in which he owns securities at the margin trading account.

A description of the amount of commissions and fees which will be collected by the financial services company from its client.

A description of the maintenance margin proportion, which shall not be less than the limit established in these rules.

A description of the procedures which will be carried out by the financial services company in the event of the decline of maintenance margin proportion less than the limit set in the Agreement, including the method of notifying the client thereof.

A statement providing that the client fully understand and approve the Margin Trading rules.

A statement showing the percentage of finance given by the Financial Services Company to the client.

A statement showing that the finance rate payable to the financial services company provided this rate shall not exceed the last finance price announced by Qatar Central Bank.

A statement providing for the funding period, which may be extended with the agreement of the two parties.

According to the provisions of Article (14) of QFMA rules: The ownership of the securities purchased by the client via Margin Trading shall entail rights to the Financial Services Company, which financed those securities. This company may claim its rights owed on its client's creditors even if they have special or general privileges.

Risks Vs Rewards

Main Risks

  • The increase in the investor’s potential losses as compared to cash purchases.
  • Financial Services Company can sell part or all securities kept in the Margin trading account on their discretion if the investor doesn’t cover the shortage of the account.

Main Rewards

  • The increase in the investor’s potential profits and rate of return on investment as compared to cash purchases.
  • Increased purchasing power (Leverage).

Marginable Securities

Symbol Company Name Symbol Company Name
MERS Al Meera Consumer Goods Co. QNBK QNB
QNCD Qatar Cement QIBK Qatar Islamic Bank
MCGS Medicare Group IQCD Industries Qatar
GWCS Gulf Warehousing MARK Masraf Al Rayan
AHCS Aamal QFLS Qatar Fuel
QIGD Qatari Investors Group CBQK Commercial Bank of Qatar
WDAM Widam Food Company MPHC Mesaieed Petrochemical Holding
ZHCD Zad Holding Company QIIK Qatar International Islamic Bank
QIMD Qatar Industrial Manufacturing QATI Qatar Insurance
QISI Qatar Islamic Insurance QEWS Electricity & Water
QFBQ Qatar First Bank QGTS Qatar Gas transport
QGMD Qatar German For Medical Devices ORDS Ooredoo
QOIS Qatar Oman Investment Co. BRES Barwa Real Estate
SIIS Salam International DHBK Doha Bank
AKHI AlKhaleej Takaful Group QNNS Qatar Navigation
DBIS Dlala Holding UDCD United Development Company
NLCS National Leasing VFQS Vodafone Qatar
MRDS Mazaya Qatar GISS Gulf International Services Co.
IGRD Investment Holding Group QAMC Qatar Aluminium Manufacturing
IHGS Islamic Holding group ERES Ezdan Holding Group
QATR Al Rayan Qatar ETF QETF QE Index ETF
 

The liquidation of margin trading positions in the event of withdrawal of approval granted to any of the marginable securities

In the event of withdrawal of approval granted to any of the marginable securities, all open margin trading positions on those securities must be closed during a period that will be announced by the Exchange after QFMA approval. At the end of this time period those securities may not be held in the client’s margin trading account with the depository. And the client has the following options to close their positions in this case:

  • Pay its related part of the margin loan financing
  • Replace those securities with other marginable securities
  • Sale of all or part of those securities