Iran Explores Listing of Debt Securities, Firms on Qatar’s Bourse

Iran plans to increase the issuance of short-term Islamic bonds as part of efforts to reinvigorate its domestic debt market
QSE is in talks with Arab and Asian countries to arrange dual listings of foreign stocks in Qatar.QSE is in talks with Arab and Asian countries to arrange dual listings of foreign stocks in Qatar.

Iran is exploring options to seek the listing of its Islamic Treasury Bills and sovereign bonds on Qatar Stock Exchange, signaling the strengthening economic relations between Tehran and Doha.

"Many Iranian companies have evinced interests in seeking dual listing with QSE," said a senior official of Iran Fara Bourse, which accounts for 82% of all the bonds issued in the Islamic Republic.

“We have some offer for QSE. The dual listing of Iran’s ITBs is an area,” added Neda Bashiri, product development manager of IFB who was on a visit to Qatar, told Qatari newspaper Gulf Times.

Iran sold its first batch of ITBs (a short-term sovereign debt) to domestic investors in September 2015. The government redeemed holders of its first batch of the bonds in March 2016, paying them $164 million at market exchange rate in the process. The bills were given to government contractors in lieu of overdue payments.

Stressing that ITB has the highest government guarantee, she said the government predicted the profit payments in advance and also the nominal value of the instrument in the budget and so the possibility of default is zero.

IFB is an over-the-counter market for securities and other financial instruments in Tehran, which operates under the supervision of the Securities and Exchange Organization. The other bourse in the country is Tehran Stock Exchange.

Confirming that preliminary discussions regarding dual listing of treasury bills and bonds have been initiated, Bashiri said depending on the response from Qatar, Iran could chalk out further strategies.

“We are in a very early stage of talks. If we get positive response from Qatar, we are ready to initiate negotiations at the highest levels,” she said.

A senior official of QSE said it is working on dual listing with different countries but did not specify.

The official of the Iranian bourse also said the sovereign bonds could also find its place in the proposed dual listing scheme with QSE.

“We have some sovereign bonds that can be listed on QSE,” she added.

Iran plans to increase the issuance of short-term Islamic bonds as part of efforts to reinvigorate its domestic debt market.

Foreign investors have invested about $8 billion in Iran’s debt market so far this fiscal year (which started on March 21), IFB chief executive Amir Hamouni said earlier.

Latest statistics indicate that the Iranian debt market makes up 4.7% of the country’s 6.69 quadrillion ($163.19 billion) GDP and 6.8% of the capital market’s total 4.67 quadrillion rials ($114 billion).

This is while a study of 15 developed countries shows that the debt market’s size is 113% and 185% larger than the countries’ GDP and capital market value respectively on average.

Highlighting that there are several companies listed on IFB under various sectors like oil and gas, automobiles, industry and banking, Bashiri said these companies are interested in dual listing in QSE.

QSE's chief executive, Rashid bin Ali al-Mansoori, said it is in talks with Arab and Asian countries to arrange dual listings of foreign stocks in Qatar.

> Strengthening Economic Ties Since Arab Rift

Iran and Qatar have been forging stronger economic ties ever since a number of Arab states—led by Saudi Arabia—abruptly severed diplomatic relations with Doha early June and imposed a blockade on the Persian Gulf country, accusing it of supporting terrorist groups.

The Qatari government has denied the accusation, blasting the blockade as unjustified and a violation of international law. Following the development, Iranian exporters have vied for the Qatari market in the absence of Doha's traditional Arab partners.

Latest statistics released by the Islamic Republic of Iran Customs Administration show Iran exported $139 million worth of non-oil goods to Qatar during the seven months to October 22, registering a remarkable 117.5% increase compared with the same period of last year.

Notably, Iran's exports to Qatar saw a significant growth during the month ending Oct. 22. Iran exported about $50 million of non-oil products to Qatar during the one-month period, which shows a fivefold upsurge year-on-year.

As the role of cargo movement through sea route has increased in Qatar after the siege was imposed, Iran has taken advantage by giving a boost to transportation routes to the tiny Persian Gulf country.

“Most of the [Iranian] shipping lines have now switched their transport services to Qatar, instead of the UAE and Oman,” Adnan Musapour, a member of the Export Committee at Iran Chamber of Commerce, Industries, Mines and Agriculture, said.

Valfajr Shipping Company (affiliated with Islamic Republic of Iran Shipping Lines), Rah Abrisham Marine Shipping Agency and Pasargad Shipping Lines are among Iranian firms that have started services to Qatar recently.

The Qatari government has facilitated business trips for Iranians by issuing six-month visas. The move has resulted in higher demand for business trips to Qatar in recent weeks.

Qatar Airways and Iran Air have recently increased the capacity of their flights to Doha, especially from the southern Iranian province of Fars where a large number of merchants reside. Iran Aseman Airlines and other private airliners are also working to launch cargo and passenger flights from Shiraz to Doha.

“Iranians have had made good headway in the Qatari market… but we need to prepare ourselves for outperforming competitors there,” Musapour said.

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