qatar ftd low resolution dec. 4

An independent supplement distributed with the FT Deutschland by Panorama Reports Ltd. who take sole responsibility for its content

Founded in 1973 and origi-nally known as the Qatar Mon-etary Agency, the Qatar Cen-tral Bank (QCB) oversees the country’s financial fortunes.

Many factors have contributed to building the monetary safe haven that the State of Qatar is today. One of the most important has been the link between the Qatari Riyal and the US dollar. Sheikh Abdulla Saud Al Thani, Governor of the QCB, be-lieves this attachment to the dollar has had a profound effect on creat-ing the solid platform on which Qa-tar’s economy stands today.

“There are several advantages in maintaining the USD peg; first of all, the fixed exchange rate provides a credible anchor for monetary pol-icy as almost all of Qatar’s export contracts and invoicing are done in the US dollar. Secondly, for most of the period in which the peg has been maintained, the Qatari economy has benefited from the stable economic environment in the US,” says the central bank governor.

Since 2001, QCB has maintained

a policy of keeping the Qatari Riyal pegged to the US dollar, at an aver-age exchange rate of 3.64 (QR) per USD. However, this is not the only action taken by the central bank, which is constantly studying new ways to fortify and stabilise Qatar’s economy.

“Despite obvious benefits there are some challenges while operat-ing under fixed exchange rates, as

we have to maintain our stance of policy consistent with that of the US, which may not always be jus-tified based on our own domestic considerations. We continue to re-iterate our faith in the pegged ex-change rate regime after carefully weighing the benefits against the costs. Nevertheless, we will con-tinue to review the situation accord-ing to evolving international and

domestic macroeconomic develop-ments,” he adds.

Unlike many countries whose economies rely heavily on exports of natural resources, Qatar has been able to withstand market fluctua-tions in the prices for those prod-ucts. The government’s national de-velopment strategy includes support for the expansion of non-hydrocar-bon industries, so that in the case of a slowdown in the oil and gas sector, the economy will not be unduly af-fected. Right now, both areas of the economy are doing well – so much so that the central bank has even lowered interest rates to make credit more easily available to companies in the private sector.

“The non-hydrocarbon sector also recorded higher growth, in-dicating resurgence in economic activity during the year in sync with the pickup in global growth. In order to support and sustain the growth momentum in 2011, we have recently reduced our key policy rate by 50 basis points to signal a soft in-terest rate regime and encourage the

flow of credit to the private sector,” says Sheikh Abdulla Saud Al Thani.

The government’s long-term vi-sion is a cautious and careful one, which seeks to preserve financial stability through a two-pronged ap-proach. To date, this strategy has been highly successful.

The first aspect of the policy is to prevent the financial system from exposure to unnecessarily high lev-els of risk. To this end, the QCB has taken preventive measures to regu-late and supervise the system, so that any weaknesses can be detected early on. Even with extensive super-vision, however, no financial system can be completely protected from all types of risk. For this reason, the second axis of the policy is correc-tive, as it seeks to contain any prob-lems at the earliest possible moment and in so doing, prevent them from spreading.

The central bank has also taken preventive steps to limit the bank-ing sector’s exposure in real estate and in stocks. Rising prices in both these areas during the past two years

have increased speculative invest-ment. As a result, restrictions have been placed on loans in the real es-tate sector and financing of stock purchases has been prohibited. With measures like these, the Qa-tar Central Bank seeks to maintain equilibrium between the country’s development goals and its need to maintain a stable financial system.

In order for investors to make long-term commitments in produc-tive sectors, they require economic stability. Even so, all countries eventually find themselves exposed to crises, long- or short-term fluctu-ations in export prices or even situ-ations of extreme financial distress that can adversely affect economic activity.

Stability is the watchword for the Qatar Central Bank and the proof is in the results of its policies. QCB keeps a close watch on all poten-tial dangers to the country’s bank-ing system; to date, it has published three Financial Stability Reviews and the intention is to make this a continuing process.

Strong foundations

for sustainable development

A special supplement by PANORAMA REPORTS LTD

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wedneSday, november 28 2012 1

The Qatari government is building on the nation’s strengths, turning doha into a leading global knowledge and financial centre

QATAR

Ranked consistently as one of the three fastest-growing econ-omies in the world since 2008,

Qatar is experiencing an unprecedent-ed economic boom that is changing the face of the country. Under the leader-ship of Emir Sheikh Hamad bin Khali-fa Al Thani, the government has made great progress towards accomplishing the goals of its National Vision 2030, which are to ensure sustainable, eq-uitable and rapid economic growth, while developing the country’s human capital, enhancing competitiveness and protecting the environment.

In a speech to the International Symposium held in Doha in June 2012, Prime Minister Hamad Bin Jas-sim Bin Jabr Al Thani emphasised the important role of the Qatari lead-ership in transforming the country into one of the most competitive and diversified economies in the world.

Qatar, he said, has earned “world-wide admiration and praise from international economic and devel-opment circles for its outstanding success in achieving a qualitative economic, social and cultural trans-formation in less than two decades, a feat which took several decades to achieve in other countries.”

Indeed, in less than two decades the Persian Gulf nation of less than two million has become the second wealthiest country in the world meas-ured by GDP per capita. The country’s double-digit GDP growth in recent years has been accompanied by good governance and competitiveness. Proof of that is the fact that the World Economic Forum ranks Qatar as the most competitive country in the Mid-dle East and the 14th most competitive in the world; the World Bank ranks it as the third country in the Middle East and 36th worldwide for ease of doing business; and Transparency In-ternational as the 22nd most transpar-ent country in the world, higher than many OECD countries.

The oil and gas sector remains the stronghold of the economy and an im-portant contributor to the state budget, which is not surprising seeing how Qatar has significant oil reserves of

25.4 billion barrels, according to the Oil and Gas Journal. The country is also home to the third largest reserves of natural gas in the world and is the number one exporter of liquefied natu-ral gas (LNG) worldwide. The sector has grown exponentially in the last decade as a result of the government’s efforts to develop the infrastructure needed to export LNG to far-away places like Japan and Belgium, and to increase the added value of energy exports by promoting downstream sectors, particularly the production of petrochemical products.

But energy only tells part of the sto-ry, as the contribution of the fast-grow-ing services sector to the economy is expected to reach 40 percent by 2015.

This trend illustrates the government’s ambition to turn Qatar into a knowl-edge and finance hub in the Middle East and a centre for Islamic culture. Since 2003, when the country’s Edu-cation City was founded, prestigious international universities like Carnegie Mellon, Georgetown University and University College London (UCL) have opened up branches in Qatar. These programmes are held to the same standards as their counterparts in Western Europe and North America, but are also in line with Qatar’s devel-opmental needs and strategic interests. Meanwhile, the Science and Technolo-gy Park, located across from Education City in Doha, hosts R&D operations of some of the largest multinationals

in the world, including ExxonMobil, Maersk Oil, Total, Shell, Microsoft, CISCO, Siemens, Virgin’s stem cells research centre and Rolls Royce.

But perhaps the most important growth catalyst in the coming years will be Qatar’s hosting of the 2022 FIFA World Cup tournament, for which the government has delegated to the Qatar 2022 Supreme Commit-tee the responsibility of supervising preparations. The committee has a budget of over $100 billion to be spent over the next ten years on in-frastructure, and has already started works on futuristic-looking stadiums that encapsulate the spirit of the new Qatar: innovative, dynamic and glob-ally-engaged.

Governing Qatar’s monetary policiesThe Qatar Central bank has done and still does an exemplary job of managing finances in the country

“We continue to

reiterate our faith in the

pegged exchange rate

regime [with the USD]

after carefully weighing

the benefits against the

costs.”

Sheikh Abdulla Saud Al Thani, Governor of the Qatar Central Bank

Qatar seeks

more ImF coop-

eration in region

Finance Minister Sheikh Yousef Hussain Kamal has called upon the IMF and the World Bank to take a “business unusual” approach to-wards the Arab nations and respond to their needs with greater flexibil-ity and speed.

Speaking at the annual meeting of the International Monetary Fund and World Bank held in Tokyo in October, the Finance Minister said the IMF should review its quota system, widen the availability of its global knowledge base and do more to develop the private sector across the Arab world.

The Minister, who spoke on be-half of his Arab colleagues, urged the two institutions to “take a ‘busi-ness unusual’ approach and be ready to go the extra mile at short notice and in demonstrating more flexibility with regards to the con-ditions placed on the Arab countries by the IMF.”

Specifically, the Minister said the IMF should review its system of quotas, which he said “lacks fair-ness.” He also addressed the issue of global knowledge – the enor-mous amount of data, studies and other resources contained in the IMF and World Bank. He said these must be made available in real time, in Arabic, and should be produced in collaboration with local country policymakers and think tanks.

Finally, Sheikh Yousef Hussain

Kanmal urged the two institutions to improve their efforts to develop the private sector across the Arab world.

“We see the private sector as the main driver for future growth and the key to realising the region’s po-tential for robust and sustained job creation, technological innovation and regional economic integration that are urgently needed,” he said.

On broader issues, the Qatari fi-nance minister said the IMF should increase its financial support for the Palestinian Authority, “to help it in building a viable economy,” and increase the representation of Arab nationals both at the Fund and at the World Bank.

Finance minister urges more flexibility

towards needs of arab nations

Sheikh Yousef Hussain Kamal, Minister of Finance

Chancellor Angela Merkel with Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabr Al Thani


wedneSday, november 28 20122 QATAR

onshore banking with

offshore benefits

The world’s most famous financial cen-tres are well established: London, New York, Frankfurt, Singapore. Many coun-tries are actively promoting the forma-tion of their own financial centres, and few have been more successful than Qa-tar in such a short time, which passed the law setting up the Qatar Financial Centre (QFC) in 2005.

Since then, the Qatari government and the QFC have invested heavily in providing financial services companies with the most modern legal, financial and physical infrastructure possible, permitting companies to move into the region to establish themselves quickly and smoothly.

The QFC is comprised of three main parts: the QFC Authority, which is the commercial arm of the centre; an in-dependent financial regulator, known as the QFC Regulatory Authority; and an independent judiciary made up of a Civil and Commercial Court and a Regulatory Tribunal.

The combination of physical, legal and regulatory structures set up by the QFC provides financial institu-tions with the vital environment they need to establish operations profitably in the Gulf Coast Council (GCC) re-gion, which boasts one of the world’s fastest-growing economies and will be the destination for billions of dollars of investment in coming years.

“Those in the financial services in-dustry like to be in close proximity to each other, but need a proper environ-ment to thrive,” says Shashank Sriv-astava, Chief Executive Officer of the QFC Authority. “I believe we have created the right legal and regulatory environment that allows the companies to not only access the domestic market with their international companies but also the regional international markets.”

The QFC provides companies with an onshore trading environment with a strong legal sector based on Eng-lish common law, a principles-based regulatory structure and a low tax of 10 percent on locally sourced profit. Profits can be freely remitted outside the country and the law allows 100 percent foreign ownership by foreign companies and places no restrictions on dealing in any currency.

Qatar has double-taxation agree-ments with more than 35 coun-tries, providing still more benefits for companies, and their employ-ees, that relocate to the country. Employees can also enjoy a high quality of living, with top-notch, reasonably-priced housing, af-fordable healthcare and many in-ternational schools.

This highly desirable offer has already attracted many well-known interna-tional financial institutions, with more than 165 licenses issued since 2005 to both local firms and companies from abroad. The list includes Allianz, AXA, Barclays Capital, Citibank, Credit Sui-sse, Deutsche Bank, ICBC, JP Morgan, Kane, KPMG, Marsh, Mitsui Sumito-mo, Morgan Stanley, Pricewaterhouse-Coopers, UBS and Zurich FS.

The QFC Authority has been so successful at setting up and promot-ing the financial centre that it has won the Best Financial Centre in the Mid-dle East award from Global Investor magazine, the flagship publication of the prestigious Euromoney group, in 2011 and in 2012.

“We are extremely proud to be rec-ognised as the best financial centre in the Middle East by such a highly re-garded industry publication,” says Mr Srivastava. “Winning this award for a second year in succession is welcome recognition of the progress we are con-tinuing to make in building a world class financial centre and the leading platform to capitalise on the emerging opportunities in the Middle East.”

The QFC is also busily planning for the future. Financial centres need well established legal and regulatory frame-works to function, but they also need a large pool of talent, and the centre has already taken important steps towards providing such a group of well edu-cated people.

The Qatar Finance and Business Academy was started in partnership between the QFCA and the Qatar Foundation for Education, Science and Community Development. The school will provide education and certification for students, and its courses are com-pletely focused on financial services.

The Qatar Financial Centre authority promotes the expansion of the

country’s financial services sector

Shashank Srivastava,CEO and Board Member of the Qatar Financial Centre Authority

Just a couple of weeks after his appointment as CEO of Qatar Ex-change, Rashid bin Ali Al Man-soori, found himself at Doha’s St Regis Hotel collecting Global In-vestor’s highly prestigious Middle East “Exchange of the Year” award.

It’s the second time Qatar Ex-change (QE) has walked off with the title, which it also won in 2010, after being picked by investors as the best stock exchange in the Mid-dle East and North Africa (MENA) region.

The award highlighted QE’s role as a significant player in the regional exchange space and the efforts it has made to enhance the quality and depth of Qatar’s capi-tal market, as well as support local companies.

In the longer term, however, the Qatar Exchange is part of a wider vision of creating a world-class fi-nancial centre around a global ex-change, in the same league as the leading capital markets in Europe, the US, and Asia.

To this end, the exchange has launched a series of initiatives. It has successfully implemented the delivery-versus-payment system to enhance the efficiency of the settlement process, opened up the market to allow banks to re-enter as brokers, and introduced direct payment of dividends into the bank accounts of investors.

Other developments include list-

ing short-term Treasury Bills to attract the attention of banks and financial institutions as well as in-vestors, and preparations to launch government, and eventually corpo-rate, bonds.

Securities lending and borrow-ing, along with liquidity provi-sion schemes, have also been in-troduced. Earlier this year, the exchange launched its ambitious Venture Market, a separate junior bourse for small and medium-sized enterprises (SMEs), whose growth is vitally important to Qatar’s de-velopment of a diversified national economy.

The choice of Al Mansoori as QE’s new CEO fits with the gener-al policy of appointing highly qual-

ified Qataris to leading positions in government and semi government institutions. He brings consider-able administrative and technical experience to the role, and for the previous 18 months served as QE’s deputy CEO.

QE was established in 2009 as a successor to the Doha Securities Market. It is jointly owned by Qa-tar Holding, the strategic and direct investment arm of Qatar Invest-ment Authority, and the New York Stock Exchange operator, NYSE Euronext, whose 20 percent stake – at $200 million – represented the largest investment it had ever made in a foreign exchange.

QE benefits from NYSE Eu-ronext’s renowned trading systems and technology. It is the first ex-change outside the NYSE Euronext family of exchanges to utilize the Universal Trading Platform (UTP), now used by every NYSE Euronext market around the world.

The intention to transform QE into an internationally recognized exchange has been there from the start. Qatar is expected to be the second-largest economy among the GCC countries by 2015, mak-ing it an ideal location for a major capital market in one of the world’s fastest-growing regions.

It is this potential that has drawn in NYSE Euronext, which is com-mitted to use Doha as its Middle East operational and support hub.

QE currently has 41 listed com-panies, with banks and insurance companies featuring prominently, and the real estate, consumer goods and services, and transport sectors also represented. For the three quarters up to September 30, 2012, the combined net profit of all the companies – with the exception of Vodafone Qatar, whose financial

year starts in April – amounted to $7.82 billion, an increase of 1.8 percent over the corresponding pe-riod in 2011.

QE has also collaborated in de-veloping a legislative framework to give investors a variety of tools, including exchange-traded funds and real estate investment trusts, while promoting transparency in the market.

Listed companies from neigh-bouring GCC countries are show-

ing an interest. QE has already begun talks with a number of GCC-listed companies who are actively working towards listing here in Qatar.

Experts suggest there might soon be a renewed effort towards initial public offerings (IPOs) in Qatar. Barwa Bank is among the major Qatari companies that have pub-licly discussed a listing on QE.

Talks have also been taking place with some of the key businesses in

the SME sector about listing on the new Venture Market. QE’s manage-ment emphasises the importance of enhancing liquidity in the market, and the exchange is already work-ing with the regulator to address concerns about the need for greater liquidity provision.

QE is ready for securities lending and borrowing to attract more for-eign investments, and applications have been made by three entities to act as liquidity providers.

Positioning Qatar as a regional financial centre

ProjeCT dIreCTor:

nathalie martin-bea

PANORAMA REPORTS LTD The old Fire Station

140 Tabernacle Street London eC2a 4Sd Tel: +44 (0) 207 300 7228

[email protected], www.panoramareports-ltd.com

At year end 2011, the Qatar Exchange had a market capitalisation of over QR457 billion (EUR 97.4 billion)

already acknowledged as the best bourse in the mena region, Qatar exchange has a new Ceo to take it towards its goal

Celebrating its 15th

year, the Qatar

Exchange was the

best performing stock

exchange in the

MENA region in 2010

and 2011


WEdnEsday, nOVEMBER 28 2012 3QATAR

Barwa Bank, the fastest growing bank in Qatar 2012

The decision by the Central Bank of Qatar ordering conventional banks out of the Islamic finance market has helped Qatar’s newest Shariah-com-pliant lender become the Gulf state’s fastest growing bank.

Barwa Bank was among the first to benefit from the QCB’s surprise ruling last year, instructing conven-tional banks to close their Islamic windows. In what was later deemed Qatar Deal of the Year by Islamic Finance News, the bank simulta-neously boosted its customer base and expanded its network from one branch to six by acquiring Interna-tional Bank of Qatar’s Al Yusr Is-lamic retail banking operations in August last year.

In June this year, it won the award for Fastest Growing Bank in Qatar at the Banker Middle East Indus-try Awards, and in September was named Fastest Growing Company at the Arabian Business Qatar Awards.

“We have seen a reduction in com-petition in a market that is growing faster than conventional banking,” says CEO Steve Troop. “It is a great place to be, and we intend to real-ise the opportunities as much as we can.”

With authorised capital of QR6 billion ($1.6 billion), and total eq-uity of QR5.1 billion ($1.4 billion), Barwa Bank offers a full range of fi-nancing services in retail, business, corporate and private banking.

The velocity of the bank’s rise is reflected in its financial results for 2011, which recorded a 882 per cent rise in net profit to QR244 million ($67 million), compared with QR25 million ($6.86 million) in 2010. When the bank launched a QR1.7 million ($467 million) rights issue last year to fund expansion, its offer of 109.1 million new shares to exist-ing shareholders was oversubscribed by 13 percent.

Barwa Bank is an associate com-pany of Barwa Real Estate, the Mid-dle East’s biggest property company by assets, which is its most signifi-cant shareholder. It also has an in-direct relationship with Qatari Diar, the real estate arm of the Qatar In-vestment Authority, through its other prominent shareholder, Qatar Hold-ing, the sovereign wealth fund’s in-vestment subsidiary.

These are important connections for the bank. “We are committed corporate bankers, so we are in-volved very much in lending to large corporations and businesses here in Qatar,” says Mr Troop.

Barwa Bank’s investment banking arm, The First Investor (TFI), raised financing for the $700 million Cit-yCenterDC development in Wash-ington DC, one of the largest urban rejuvenation projects in the United States, for which Qatari Diar is the anchor investor. TFI has also started

a property fund in Brazil as a joint initiative with the US-based Hines International Real Estate Holdings.

At home, Barwa Bank participates in Qatar’s economic development, including working with Hochtief, the German construction company, based in Essen. “Much of the activity is associated with major infrastruc-ture projects, but not exclusively,” says Mr Troop.

The bank has also developed a strong focus on assisting small and medium-sized enterprises (SMEs), and was one of the first to sign up to Qatar Development Bank’s Al Dha-meen scheme for start-ups, an indirect lending facility to guarantee commer-cial bank loans to the private sector.

Mr Troop says that at present Barwa Bank is essentially a do-mestic institution, but its long-term ambitions will eventually see it es-tablishing offices beyond Qatar’s national boundaries.

“We have lots to do before we think about expanding internationally. I would stress, however, that we are am-bitious and wish to grow. We can only go so far in this market, and inevitably we will go international,” he says.

Meanwhile, since establishing its Islamic Capital Markets plat-form earlier this year, the bank has emerged as a key player in the grow-ing market for Shariah-compliant bonds, known as sukuks.

In September, it was appointed co-lead manager for the Republic of Turkey’s first sukuk, a $1.5 bil-lion issue, following its involve-ment in high-profile sukuks for the Government of Dubai, the State of Qatar, Saudi-based Islamic Develop-ment Bank, and real estate developer Emaar Properties.

Bloomberg Islamic Finance league tables rank Barwa Bank among the top 10 arrangers for international, global and MENA region sukuk issues.

awards for Qatar’s newest Islamic lender as it builds on a remarkably successful entry into the market

QIB: the benchmark

Islamic bank in Qatar

While the rapid expansion of Islamic finance is a relatively recent phenom-enon, Qatar Islamic Bank, the Gulf Arab state’s largest Shariah-compli-ant lender by assets, this year marks its 30th anniversary.

Established in 1982, QIB has long been at the forefront of the Islamic banking industry, extending its ac-tivities from Qatar and the Gulf to the Middle East, Asia, Europe, and North Africa.

The bank defines itself as “the benchmark Islamic bank in Qatar”, and experts agree. Global Finance this year named it Best Islamic Financial Institution in Qatar, recognising the bank’s contribution to the growth of Islamic banking both locally and in-ternationally, while The Asset maga-zine awarded it Best Bank in Qatar. Last year it was named Best Islamic Bank in Qatar for 2011 at the Islamic Finance News (IFN) awards.

Despite the plaudits, QIB’s anniver-sary year does not find the bank resting on its laurels. Indeed, recently it has been undertaking a transformation pro-gramme in order to take full advantage of the promising growth opportunities in Qatar and beyond.

With paid-up capital of QR2,360 million ($648 million), and a well-dis-tributed network of 30 branches, QIB holds a 36 percent share of the Islamic banking market in Qatar, and an ap-proximate market share of 10 percent.

Along with offering a wide range of products and services for individuals, the bank is active in financing for busi-nesses of all sizes, from major corpora-tions to small and medium-sized enter-prises, and micro enterprises, as well as participating in joint financing projects with other financial institutions.

One of the largest initiatives of na-tional importance to which it has con-tributed is the Barzan Gas project, being implemented as a joint venture between Qatar Petroleum and ExxonMobil Qa-

tar. QIB provided $500 million to fi-nance the project, which is the biggest portion of the total Islamic tranche of $850 million.

More recently, in August, QIB signed a $380 million package for the Qatar Gas Transport Company (Nakilat) in partnership with Qatar International Islamic Bank (QIIB). QIB has also ex-tended a $500 million Islamic financing package to Qtel.

The bank’s sound financial position and business strategy is reflected in its rating from international ratings agen-

cies. In August, Fitch Ratings affirmed QIB’s long-term issuer default rating at ‘A’ with a stable outlook, and viability rating at ‘bbb’.

Standard & Poor’s, rating the bank for the first time, recently assigned its ‘A-’ long-term and ‘A-2’ short-term counterparty credit ratings to QIB with a stable outlook rating on the long-term. S&P hailed QIB’s leading position in the Qatari Islamic banking segment, and its business model and management.

Financial results for the nine months ended 30 September 2012 show QIB realised a net profit of QR1.13 bil-lion ($310 million), a rise of 2 percent compared to same period last year. The bank’s total assets increased by 26.7 percent to stand at QR 66.8 billion ($18.3 billion), while customer deposits show 50 percent growth at QR39.9 bil-lion ($10.9 billion).

Sheikh Jassim Bin Hamad Bin Jas-sim Bin Jaber Al Thani, QIB’s Chair-man, says, “The bank continues to show significant growth, stable and well diversified revenue streams, and positive results.”

QIB has also recently been celebrating the hugely successful first tranche of its new $1.5 billion Islamic bonds (sukuk) programme, a $750 million 5-year sukuk priced at a profit rate of 2.5 percent – the lowest profit rate ever achieved by any GCC financial institution.

Marking QIB’s return to global debt markets after two years, the sukuk aroused enormous interest from interna-tional as well as regional investors, with strong participation from Asia and the MENA region, and also from Europe. With the final book reaching $6 billion, the issue was 8 times oversubscribed in a year when there has been no shortage of Middle East sukuk issues. Sheikh Jassim says the sukuk programme will enable the bank to further contribute to Qatar’s economic growth both at home and internationally.

Its anniversary year finds Qatar Islamic Bank renewed and ready to

exploit opportunities for growth in Qatar and beyond

a financial bridge between

the region and the world

Masraf Al Rayan, one of Qatar’s largest banks, set itself the goal of becoming an international Islamic finance institution right from when it was established seven years ago.

“Because of what was going on in the whole region in terms of growth, and particularly in Qatar, we needed a mega-sized bank to cater to Islamic and non-Islamic customers,” says Adel Mustafawi, the bank’s Group CEO. “From the very beginning, our strategy was to start from Qatar, then expand to the GCC, other countries in the Middle East & UK, building the real economy through the financial sector.”

Today, Masraf Al Rayan has become one of Qatar’s largest Is-lamic banks, with a market share by assets estimated at 10 percent at year-end 2011. It was the first bank in Qatar to have shareholders from Saudi Arabia, Kuwait, Bahrain, UAE and Oman, in addition to its domestic base of shareholders.

The Doha-based lender makes no secret of its interest in making acquisitions in other GCC coun-tries and beyond.

Currently, it is working on a plan to enter the UK market by acquir-ing a 70 percent holding in Islamic Bank of Britain (IBB), in a deal in which the Government of Qatar would secure the remainder of the shares. This would be the bank’s first advance beyond the GCC, giving it a foothold in the Euro-pean market.

While Mustafawi insists Masraf Al Rayan won’t be rushing into Europe, it could be an attractive prospect for the bank in the longer term, given the potential for Is-lamic banking in countries like Germany and France. In the mean-time, he has noticed an increasing number of international investors

taking an interest in ethical Islamic financial institutions.

“International investors are be-coming increasingly aware of Islamic products,” he observes. “They see it as an ethical, less risky kind of banking that serves to benefit both the client and the financial institution.”

Masraf Al Rayan’s results for the first nine months of the year show net profit up 7 percent to QR1.08

billion ($297.418 million) com-pared to the same period in 2011. Financing activities increased nearly 32 percent to QR37.86 bil-lion, while customer deposits rose more than 29 percent to QR51.72 billion, from QR40 billion.

Offering a full range of retail, corporate, private banking and investment banking services, the bank has been creative and innova-tive in terms of its products. “We compete with conventional banks in terms of the type of products that we offer,” says Mustafawi.

It is extending its nationwide branch network and, in the wake of Qatar’s conventional banks being ordered to cease offering Islamic banking services, has launched a brokerage arm, Al Rayan Financial Brokerage Company.

Moody’s Investors Service says Masraf Al Rayan is well placed to benefit from the strong economic growth in Qatar. Recently upgrad-ing the bank’s credit rating to A2 Prime-1 from A3 Prime-2, it cited the quality of its assets, a growing domestic franchise in the corporate market in Qatar, and “strong finan-cial fundamentals, in comparison with its peers.”

Mustafawi says Masraf Al Rayan will be one of the fastest-growing financial institutions in the region, extending its activities across the Qatari economy.

“Our strategy is to link the real economy with the financial sec-tor,” he says. “We are going to ex-pand into other sectors. Today, we are into oil and gas services – we have a joint venture with an inter-national company. We are also in-volved in a real estate development with another international compa-ny. We have a facilities manage-ment company, an insurance com-pany and an industrial company.”

ambitious plans for growth in the region and beyond have always

been part of the plan for Masraf aI Rayan

Steve Troop,CEO of Barwa Bank

COnvEnTiOnAl BAnking SySTEm (inTEREST-BASEd SySTEm)

not based on religious laws or guidelines – only secular banking laws.

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“The bank continues

to show significant

growth, stable and

well diversified

revenue streams, and

positive results.”

6KHLN�-DVVLP�%LQ�+DPDG�%LQ�-DVVLP�%LQ�-DEHU�$O�7KDQL��&KDLUPDQ�RI�4,%

“Our strategy is to

link the real economy

with the financial

sector. We are going

to expand into other

sectors.”

Adel mustafawi, group CEO of masraf Al Rayan

Source: Abu Dhabi Investment Bank


wednesday, november 28 20124

solidity and growth at

the national bankQatar national bank is on its way to becoming an icon

in the middle eastern financial sector

ahli bank and the

results of excellence

It may not be the biggest, but in only 30 years, Ahli Bank QSC has become one of the key firms in the financial sector in Qatar.

The bank was founded in 1983 with the purpose of providing banking services tailor-made for the needs of the country. Ahli Bank boasts a large integrated network of 17 branches in Qatar offering a host of products and services from corporate bank-ing, treasury and investments and retail to private banking and wealth management.

The bank is listed in the Qatar Stock Exchange, with a market capitalisation of nearly QR 6.2 billion or EUR 1.34 billion as at November, 2012.

From the origin of the bank, it was clear that Ahli Bank was born with a strong focus on the corporate and financial seg-ments. Qatar has experienced an economic boom supported by the oil and gas industry. The country needed the help of the financial sector to get funds for developing major infrastructure projects. Some analysts expect that Qatar will still see strong lending growth in the next dec-ade, so the future of the busi-ness of Ahli Bank at home is guaranteed.

According to SICO Research, a division of the Bahrain-based regional investment bank, Se-curities & Investment Company (SICO), Qatar has indicated that it will be undertaking ma-jor infrastructure projects worth QR820 billion or EUR 177 bil-lion over the next five years. This should lead to strong credit demand growth, in the area of 18 to 20 percent compound an-nual growth rate (CAGR) during 2011-2016, the report said.

But Ahli Bank also has a growing retail customer busi-ness. Last year, the bank report-ed net profit of QR 442 million or EUR 95 million, the highest in the company’s history. Ahli Bank’s profits are still growing: during the first nine months of 2012 net profit grew 5 percent

from the same period last year, to QR 367 million or EUR 79.2 million.

Ahli Bank has been recent-ly awarded the coveted “Best Commercial Bank in Qatar” by leading international finance magazine World Finance and by Arabian Business at the pres-tigious Arabian Business Qatar Awards. The awards comes in recognition of Ahli Bank’s con-tinuous commitment towards providing excellent services to its banking customers, and its vision to implement internation-al best practices to ensure the

delivery of trusted commercial banking services.

If we examine the financial data, these awards come as no surprise. It’s worth noting, for example, the growth in total as-sets, to QR 19.7 billion or EUR 4.3 billion at the end of the last quarter, even after the Qatar Central Bank last year ordered conventional banks to close their Islamic Banking operations by the end of 2011. Ahli Bank is the fifth Qatari lender by assets.

The growth of the business has been also healthy. Ahli Bank has a capital adequacy ratio of 22.1 percent NPL (Non Performing Loan). Coverage stood at 99 percent as of December 2011, something far from the num-bers of the banking system in Europe. This performance was recognised by the international rating agencies when Fitch re-affirmed the bank’s credit rat-ing of A- with a stable outlook, only two notches lower than Deutsche Bank, for example.

But even in Qatar, the financial system may face some handicaps. Experts expect some problems to access the funding. Accord-ing to a recent research report by Citi, “as Qatar proceeds with its expansionary strategy, the do-mestic banking system is facing growing challenges to support funding the country’s ambitious growth strategy. Strong credit growth averaging more than 30 percent over the last 18 months, which has largely outpaced that of customer deposits (averag-ing 17 percent over the same period), resulted in a sharp rise in loan-to-deposits ratios (LDR), exceeding 120 percent at end-June 2012,” said the analyst of the bank.

But the executives of the banks expect a very encouraging performance for the bank and they think the business could benefit from the government’s budget spending for the fiscal year 2012-2013. In fact, they see many investment opportuni-ties in the local market.

since 1983, ahlibank has served its clients through a full array of

products and services within major business segments

2011 was a

landmark year for

Ahli Bank, as it

posted a net profit of

some EUR 95 million,

the highest in the

bank’s history

QATAR

If you haven’t already heard of Qatar National Bank (QNB), you soon will, as the lender is quickly expanding its footprint in the Middle East and North Africa (MENA) region. And if it continues to grow at the current pace, QNB will soon become one of the biggest global banks.

QNB was founded in 1964 with one clear objective: to help Qatar reach its potential. Fifty years later, it has become a global bank, offering retail, corporate and investment bank-ing services.

From the start, the lender has had a stable shareholder structure, with a 50 percent stake owned by the Qatar Investment Authority. Over a half century, the bank has climbed to first place in the Qatari stock market, with a market capitalisation of over $25 billion. At the beginning of 2012, the bank announced its new strategic plan for the next five years, which aims to make QNB Group a benchmark in Middle East and Africa.

Already the largest financial insti-tution in the MENA region with total assets of QR350 billion (EUR75.3 billion) in June 2012, QNB also has the largest international network of any bank in the region, covering countries in the MENA region, Eu-rope (France, Switzerland and United Kingdom) and Asia.

And on top of that, QNB has the largest market share in the domes-tic business. The bank’s net profit is equal to nearly half the total profit of the 18 banks in the country and more than the half of their deposits, credit and loans.

The bank’s obsession with growth may have been derived from the need to diversify revenues in order to face the obstacles that may arise in Qatar. According to some experts, the Qatari banks’ margin spreads are expected to come under pressure during the sec-ond half of 2012 and through 2013, driven by asset spread contraction.

A Citi report suggests “margins are likely to contract by between 20 and 30 basis points in 2012, due to factors which include a lower demand for higher-yielding local currency loans, and a balance sheet shift towards low-er-yielding public sector lending.”

On a systemic level, the report

notes, a move by national banks to in-crease their lending towards the pub-lic sector will negatively impact their asset yields. Coupled with a decline in public sector deposits, and funding through more expensive private sec-tor liabilities, should further shrink banks’ net interest margins.

If QNB continues with its current hunger for growth, its international position will be much larger in the near future. Within the space of a few months, QNB has begun the due dili-gence process to acquire the Egyptian unit of Societe Generale; increased its holding in the Dubai-based Commer-cial Bank International to 40 percent; acquired an increasing stake in Man-

sour Bank of Iraq to 51 percent; and acquired a 49 percent stake in Libya’s Bank of Commerce & Development.

It seems QNB is doing its job well, as the latest results show a robust pace of growth. In the first nine months of 2012, net profit rose to QR 6,228 million from QR5,417 million a year earlier.

Early in 2012 this performance was recognised by the magazine The Banker, which ranked QNB Group as the region’s most valued bank-ing brand. In 2012, QNB leaped five places to become the number one brand in the region, and moved up 77 places to 114th amongst the

world’s top 500 banking brands.In a world obsessed with the safe-

ty in the financial sector, it’s worth pointing out that QNB Group has also been named one of the World’s 50 safest banks, according to Global Finance magazine. The ranking was created through an evaluation of long-term credit ratings – from Moody’s (Aa3), Standard & Poor’s (A+) and Fitch Ratings (A+) – of the 500 larg-est banks worldwide.

The quality of QNB’s assets, along with the good projections for the fu-ture, are aligned with its current credit ratings, which are the highest in the region and on a par with the best global f i n a n c i a l ins t i tu -tions.

Ali Shareef Al-Emadi, CEO of Qatar National Bank

Sheikh Faisal bin Abdul Aziz bin Jassem Al Thani, Chairman of Ahli Bank

a non-profit financial institution,

Qdb is mandated to accelerate the

development of the private sector in

line with Qatar’s national vision.

Qatar development bank

established

1997

Total assets (Q4 2011)

Qr3.7 bn

named best Islamic bank in Qatar

for 2011, QIb holds a 36% share of

the Islamic banking market in Qatar,

and a 10% overall market share.

Qatar Islamic bank

established

1982


Qr66.8 bn

This is one of Qatar’s largest Islamic

banks. In october, moody’s upgraded

masraf al rayan’s ratings to a2/

Prime-1 with a stable outlook.

masraf al rayan

established

2006


Qr61.4 bn

The largest bank in the mena region,

Qnb was named the region’s most

valued banking brand by The banker

earlier this year.

Qnb

established

1964


Qr351 bn


wednesday, november 28 2012 5QATAR

Qatar’s ‘next

generation bank’

This past summer, Qatar’s al khaliji surprised the banking world once again by offering three 150-gram gold bars – one a year for three years – to customers taking out a new mortgage loan. The bank’s Golden Reward product empha-sised the exclusive service targeted at affluent and high net worth cus-tomers provided by this leading fi-nancial institution. Indeed, al khaliji took home the Best Premium Bank-ing Service at the annual Banker Middle East Product Awards this year, capping what has been a pio-neering, and highly successful, four years for this young bank.

Launched in just 2008, al khaliji promoted itself as the “next gener-ation bank”, catching the financial world’s attention out of the gate by offering Qatar’s first eco-friendly ATMs, featuring environmentally friendly nanotechnology screen displays, power and paper saving features. Its Fusion account was the first interest-bearing service to combine the benefits of both a savings and checking account. The following year, the bank launched two more innovative products, both linked to gold prices: the country’s first wealth management guaranteed structured product and a structured deposit, which was heavily oversubscribed. By early 2010, al khaliji was ranked third in Qatar for performance by CPI Financial.

By 2011, al khaliji had posi-tioned itself at the forefront of innovative banking. Its Qatar-centric, corporate and treasury led approach and customer-fo-cused strategy had resulted in incredible outcomes, and its executives were being sought after in regional and global conferences for their input and expertise. The bank con-tinued to surprise the finan-cial world with its growth, recording a net profit of QR427 million ($117 mil-

lion) for 2010, up 155

percent over 2009. Also in 2011, the bank’s investor website was ranked as number one across the Middle East, and at the beginning of 2012, Fitch awarded al khaliji with a Long Term Issuer Default Rating of ‘A-’, a bank milestone.

This trailblazing trajectory was capped by CPI’s award for its pre-mium service this past spring. In fact, the product is a full package of services comprised of seven different components under one brand: a dedicated relationship manager, access to upgraded and exclusive Premium centres at the branches, wealth management ser-vices, preferential rates on all types

of loans, family benefits, and com-plimentary ‘Priority Pass’ mem-bership. Additionally, the premier service is convenient Doorstep Banking, which provides for resi-dential or place of work visits from the client’s dedicated relationship manager, eliminating the need for branch visits.

Headquartered in Doha and list-ed on the Qatar Exchange since 2007, al khaliji offers a full range of banking products and services to premium, business, corporate and international customers in Qatar. Its subsidiary in Paris, Al Khaliji France, boasts a network of branches in the UAE covering Dubai, Sharjah, Ras Al Khaima and Abu Dhabi, providing cus-tomers and businesses with local, regional and international bank-ing services. The group boasted QR27.8 billion ($7.63 billion) in total assets and QR12.7 billion ($3.48 billion) in customer depos-its as of 30th June 2012.

From the time it launched opera-tions in 2008, al khaliji has shown growth in every quarter. Manage-ment’s stated intention is to remain focused on major corporate and business clients by offering them financing solutions directed to their particular needs. The bank’s quarterly results continue to reflect the success of this strategy.

On the release of third quarter 2012 results, in which al khaliji showed an increase in net profit of 5 percent to QR378 million ($103 million), Group CEO Robin Mc-Call comments: “al khaliji’s core business is Qatar-centric with a GCC coverage model. This sin-gle market has experienced robust growth rates and our sentiment for sustained returns remains positive given the strong underlying fun-damentals. Qatar’s hydrocarbon wealth and planned economic di-versification bolstered by signifi-cant infrastructure build-out in the coming years will drive growth in the banking sector.”

al Khaliji offers next-generation banking by blending

tradition with innovation

“Our clear business

strategy is aligned to

the economic reality

of the region.”

Robin McCall, Group CEO of al khaliji

Growth that reflects

a robust economy

Commercialbank, Qatar’s largest pri-vate sector bank, has recorded a profit every year since incorporation in 1975. Today, with Qatar’s economy expand-ing at a robust pace, Commercialbank’s sound business strategy and diversifi-cation are allowing it to share in that growth.

The bank’s results for the first nine months of 2012, showed a 4 percent increase in net profit over the same pe-riod the year before. Assets rose 8 per-cent, while loans and deposits grew 17 and 13 percent, respectively.

On their own, the results were un-questionably solid, but given that 2011 was the bank’s best year to date – with a 15 percent jump in profit – the figures are even more remarkable. His Excel-lency, Abdullah Bin Khalifa Al Attiyah, Chairman of Commercialbank reiter-ated his belief that Commercialbank’s success reflects the strength of Qatar’s economy and the bank’s strategic rea-lignment within it.

The Chairman said the bank has played an integral role in the growth and prosperity of Qatar for several decades, and that it remains committed to playing a central role in the devel-opment and diversification of Qatar’s economy.

“Qatar’s economy has grown stead-ily in the third quarter, although at a slower rate than in the first half of the year, with demand for credit facili-ties continuing to be mainly from the Public Sector. Commercialbank has, however, successfully identified op-portunities to grow its loan book and its revenues, delivering strong results for the first nine months of the year. We will look to maintain this momentum for the remainder of 2012,” he said.

Headquartered in Doha, Commer-cialbank has total assets of QR 76.4 billion ($20.98 billion) as of 30 Sep-tember 2012. The bank offers a com-prehensive range of financial services, including corporate, retail and invest-ment services, as well as owning and operating exclusive Diners Club fran-chises in Qatar and Oman.

A strong capital base and decades of expertise have allowed Commercial-

bank to take a cutting-edge role in Qa-tari finance. The bank currently offers banking services through a network of 29 branches, 162 ATMs, Internet Banking, Mobile Banking and the larg-est EFTPOS network in the country. In 2011 the bank underwent a strategic realignment of its corporate and retail businesses and entered into the bancas-surance market.

These decisions are now paying off, said Hussain Al Fardan, Commercial-bank’s Managing Director. He added, “The operating environment in Qatar continues to be challenging but Com-mercialbank has delivered a positive

performance in the year to date with higher earnings, growth in lending and strong asset quality. The bank remains well positioned for continued growth in the remainder of the year.”

A successful diversification strategy has also expanded Commercialbank’s GCC footprint through a 34.9 per-cent shareholding in National Bank of Oman (NBO) in Oman and a 40 percent shareholding in United Arab Bank (UAB) in the United Arab Emir-ates, both of which are strongly posi-tioned to grow their businesses in their respective domestic markets. NBO is the second largest bank in Oman with 66 branches in that country along with three branches in Egypt and one in Abu Dhabi, while Sharjah-based UAB op-erates 15 branches across the emirates.

NBO and UAB contributed QR 190 million to Commercialbank’s net prof-it, according to the September report, a 12 percent increase from NBO and a 32 percent jump by UAB. Andrew Stevens, Commercialbank’s Group CEO, commented, “Commercialbank maintained the progress seen in the first half of the year to deliver a record nine month profit at 30 September 2012, and our affiliated banks in Oman and the UAE again delivered outstanding financial performances for the same period with strong growth in profit-ability and lending. For the remainder of 2012, we will continue to focus on growing our domestic corporate and retail businesses and developing the strength of our regional alliance.”

Commercialbank enjoys strong credit ratings of (A) from Fitch, (A1) from Moody’s and (A-) from Stand-ard & Poor’s. The bank is listed on the Qatar Exchange and was the first Qatari bank to list its Global Deposi-tory Receipts as well as bonds on the London Stock Exchange. Additionally, Commercialbank’s Swiss Franc bond issuance in December 2010, listed on the SIX Swiss Exchange, was the first public bond issuance by a Qatari bank in Switzerland. In 2011, the bank was awarded the JP Morgan Quality Rec-ognition Award for Operational Excel-lence for the seventh consecutive year.

established in 1975, Commercialbank has invested in diversification

and human capital, providing a strong foundation for growth

“Our affiliated banks

in Oman and the UAE

have, again, delivered

outstanding financial

performances. ”

Andrew Stevens, CEO of Commercialbank

Part of the barwa Group, barwa bank

is Qatar’s fastest-growing bank. net

profits for 2011 were 882 percent

higher than those posted in 2010.

barwa bank

established

2009


Qr21.5 bn

recently named “best Commercial

bank in Qatar”, ahli bank enjoys a

credit rating of a- with a stable

outlook from Fitch.

ahli bank QsC

established

1983


Qr 19.7 bn

In al khaliji’s second year, CPI Financial

already ranked the bank third in Qatar

for performance. In 2012, Fitch gave it a

Long Term Issuer default rating of a-.

al khaliji

established

2008


Qr32 bn

This bank boasts strong credit rat-

ings. Fitch, moody’s and standard &

Poor’s have awarded Commercial-

bank a, a1 and a-, respectively.

Commercialbank

established

1975


Qr76.4 bn


WEDNESDAY, NOVEMBER 28 20126 QATAR

Qatar’s building industry has enjoyed unprecedented growth in recent years, the result of a buoyant economy driv-en by the oil and gas sectors but with pressing needs to develop major infra-structure, housing and social projects.

As a result, the skyline and even the geography of Doha have undergone a sea-change, with projects such as the new international airport, the Katara Cultural Village and the artificial is-land called The Pearl Qatar, a 4 mil-lion square-metre exclusive property development built on reclaimed land.

Today, the building boom continues but with a different focus. On the one hand, as Qatar prepares for the FIFA Soccer World Cup in 2022, plans are well underway for the construction of hotels, stadiums and other related infrastructure. According to a report

by Commercialbank Capital, spend-ing on the World Cup preparations could reach as much as $150 billion (EUR XX billion) in the next five to six years.

However, the World Cup won’t be the only catalyst for growth. The Qatari government, having invested heavily in the hydrocarbons sector over the past decade, is now moving ahead with plans to promote non-oil industries.

Investments in tourism, transporta-tion, utilities, including solar energy, will provide opportunities for build-ers, as will projects in education and health care. The Qatari government plans to spend $225 billion on con-struction and infrastructure projects in the 2011-2016 period. Commercial-bank Capital estimates that the total

construction market size through 2020 could be as large as $315 billion.

Two of the companies which are set to profit from this activity are Velosi and the Qatar Building Com-pany (QBC), both featured on this page. Neither one is a newcomer; each has established itself as a major player in the building sector and has strengths in particular areas, Velosi as a contractor to the oil and gas industry worldwide; and QBC with its history as a civil engineering company which has branched out into building mate-rial supply trading and other areas.

Both are well-positioned to take advantage of the upswing in construc-tion as Qatar’s government seeks to create a sustainable economy with a wide range of sources for producing wealth, apart from just oil and gas.

Qatar builders riding a wave of growthBy 2016, the Qatari government will have spent upwards of EUR 176 billion on new infrastructure and construction projects

QBC prepared for World

Cup construction boom

Qatar’s government plans to spend more than $100 billion (£63 billion) over the next decade on developing infrastructure for the 2022 FIFA World Cup competi-tion. One of the companies likely to benefit from this boom is Qatar Building Company (QBC).

As the company’s Managing Director Ali M T Mustafawi puts it: “We realise that there will be a lot of opportunities across our divisions. That is why from now until 2022 it is worth making high capital investments.”

He says that for events such as the World Cup, “It is not about how com-plicated a project is, but more about how quickly and efficiently you can build sta-diums of the highest standards, and the necessary community links to them.”

Qatar’s construction industry is fore-cast to grow 12 percent a year through 2015, as a result of World Cup prepa-rations. The building sector will also

be boosted by Qatar’s National Vision 2030, which has a budget estimated at $800 billion to help diversify the econo-my and reduce the country’s dependence on the petroleum and gas industries.

QBC will likely be a beneficiary from all that development spending. A re-cent report by Commercialbank Capital placed the company among Qatar’s top 10 builders in 2011, with $419 million in new contracts.

QBC has already secured itself as the most self-reliant company in the Qatari infrastructure market. Established in 1971 as a civil engineering and build-ing contractor, QBC has since built up a broad client base that ranges from gov-ernment agencies, international contrac-tors, private developers and oil and gas companies.

“We are involved in almost every major public project in Qatar,” says Mr Mustafawi, “whether directly as a con-

tractor, or indirectly by supplying the heavy equipment and machines, or the construction materials such as concrete, asphalt and steel.”

QBC also has different types of col-laborations on a per-project basis with prestigious multinational companies.

When the company was founded by Mr Mustafawi’s father, Mohammed Tayeb Mustafawi, Qatar was enjoying its first development boom, with the construction of schools, hospitals, public housing, and oil and gas projects.

Over the years, QBC has seen consid-erable expansion of its activities, open-ing its production capabilities in 1981; now, production includes ready-mix and precast concrete, aeronautical-quality asphalt, steel, and fill, sub-base and ag-gregate materials. Its trading division began in 2000, when it started selling the world’s leading brands of heavy equip-ment.

Today, QBC continues to explore new avenues and relationships with technol-ogy-holders to develop its business and uphold its command of the industry.

“What we look for are new areas of business that produce solid, sustainable ROIs,” Mr Mustafawi says. “We cre-ate synergies with reputable companies by showing them the platforms we pro-vide in terms of value-added businesses, production facilities and factories, fleet of equipment, engineering and market know-how, and the long-established cli-ent relationships critical for certain pro-jects.”

Mr Mustafawi underscores that QBC uses the latest technology to be more ef-ficient, protect the environment and stay at the industry’s forefront: “We lay em-phasis on the latest technology and sup-port high levels of capital investment.”

The 2022 FIFA World Cup construction spend will likely benefit

Qatar Building Company (QBC), the market leader

Raising the standards in

oil and gas services

Acquisition of other companies pro-viding complementary services is one way in which businesses can grow, and can be particularly successful when an international market leader links up with a local firm.

That’s the thinking behind the merger this year between global in-spection, quality assurance, and cer-tification company Velosi and Qa-tar Center for Career Development (QCCD), specialising in management development and training programs.

Founded in 1982, Velosi is a lead-ing provider of services to the oil and gas industries worldwide, operat-ing through regional headquarters in the United States, the UK, Malaysia, South Africa, and the United Arab Emirates. In 2011 it became part of the Applus Group, turning the Span-ish multinational into one of the larg-est companies in the field of safety and quality.

Velosi has 63 offices in 36 countries worldwide, and in the Middle East employs around 1500 people in seven countries. A market leader in Qatar’s energy sector, its clients include lead-ing national and multinational oil and gas companies, such as Qatar Pe-troleum, Qatargas, RasGas, Qapco, BP, Shell, Exxon Mobil, Petronas, ONGC, and Chevron.

Outside of the energy industry, the company sees huge potential for winning business in the construction sector as major new infrastructure projects get under way in the run up to Qatar hosting the FIFA World Cup in 2022 as Velosi is diversify-ing to infrastructure sector with the help of Applus.

QCCD was established in 2007

to offer government and private sector clients a complete range of management soft-skills training programs, cost-effective human re-sources consultancy, and executive search services.

Following Velosi’s acquisition of around 75 percent of QCCD’s shares, a new entity, Velosi-QCCD, was launched in April. Registered in the

Jersey in the Channel Islands, Velosi-QCCD will operate as an offshore arm of Velosi, Qatar.

“This new venture is set to provide a fresh and innovative concept of hu-man resources, management, execu-tive, and leadership training under one roof,” says Sudhir Pandra, Velosi’s Regional Manager, Middle East said at the time the merger was announced.

“Our combination unites two mar-ket leaders – Velosi and QCCD – in asset integrity, health, safety and en-

vironment, quality assurance, qual-ity control, engineering services, and now all forms of specialist HR con-sultancy and soft-skills management training, and executive development.”

Pandra says that when they were separate companies Velosi and QCCD shared a common objective to ensure absolute customer satisfaction, provid-ing a professional and ethical service.

“We remain dedicated to this objec-tive now that we are operating as one. Together, Velosi-QCCD is privileged to serve more than 200 client organi-zations in more than 45 countries. The depth of our resources and the breadth of our reach are now stronger than ever,” he said.

One of the objectives is to estab-lish an academy to provide training to meet specific human resources needs in support of Qatar’s National Vision 2030.

Dr. Shaukat Chandna, Velosi-QC-CD’s Managing Director, said, “There is a great need for proper HR consul-tancy standards to be established in Qatar to realize the goal set under the Qatar National Vision 2030.”

He says the merger of the two market leaders has created an entity with “extraordinary capability” that will provide its clients with access to “world-class HR solutions.”

“We are now uniquely positioned to provide a diversified range of client organizations with the most compre-hensive set of solutions available to extend mission critical services and assure they are managed, secured, compliant, and developed in line with international best practices of man-agement capabilities and values,” Dr. Chandna said.

Velosi has emerged as the preferred supplier of management ser-

vices in Qatar’s energy sector

Sudhir Pandra, Middle East Regional Manager of Velosi


WEDNESDAY, NOVEMBER 28 2012 7QATAR

Building a global

portfolio

Established just seven years ago, Qatar Investment Authority (QIA) is on target to become one of the world’s four largest sovereign wealth funds by 2015, along with those of China, Singapore and Abu Dhabi. With an estimated $85 bil-lion in total assets, QIA has a ma-jor role to play in diversifying the country’s revenue sources.

As Qatar’s LNG exports ap-proach their peak capacity, QIA, already the world’s 12th largest sovereign wealth fund, is set to benefit from greater purchasing power. Indeed, the fund and its various subsidiaries (Qatar Hold-ing and Qatari Diar) have had more than $30 billion at their disposal to invest in 2012.

This follows a considerable spending spree during 2010-2011. From retail and real estate to energy and banking, the Doha-based fund continues to build its international portfolio at a remarkable pace.

In May of 2010, QIA purchased the UK’s landmark Harrods Group from Mohammed Al-Fayed for $2.2 billion. Plans are in the works to build a Harrods hotel in Kuala Lumpur (and later in New York City and Paris) next year. This acquisition was followed in September by a $5 billion frame-work deal between QIA and the Greek government paving the way for future investment in sev-eral sectors, including energy and banking. Later that same year, QIA purchased a 5 percent stake in Banco Santander’s Brazilian arm, Banco Santander Brasil, for $2.7 billion.

In 2011, Qatar spent $466 mil-lion on the Shell oil company’s building, Shell Centre in London, a precursor to its purchase of a significant stake in Royal Dutch Shell. Along similar lines, QIA has recently picked up a 3 percent stake in France’s Total and is in talks to buy a stake in Italy’s Eni. The fund has shares in Energias de Portugal and Iberdrola of Spain, as well.

In sports, the year 2011 also had significance for Qatar. One of Eu-rope’s top football teams, FC Bar-celona, began displaying the logo of Qatar Foundation – headed by the Emir’s wife Sheika Mozah; and QIA bought a 70 percent stake in

French football club Paris St Ger-main. This year, the fund swept up the remaining 30 percent.

QIA’s strong incursion into France continued when it snatched up a 26,000 square-meter retail complex on Paris’ emblematic Avenue des Champs Elysées, for EUR500 million. One of the most celebrated promenades in the world, Champs Elysées is the ad-dress of luxury brand Louis Vuit-ton, another name recently added to QIA’s portfolio of investments; in March this year, the fund ac-quired just over a 1 percent stake in Louis Vuitton Moet Hennessy group.

In the UK, QIA’s name is linked to various important real estate projects, such as the redevelop-ment of the 95-storey Shard Sky-scraper, London’s Olympic Park and One Hyde Park residences. Qatar’s real estate, banking and in-frastructure investments in Britain top $16 billion.

Headed by the Qatari Prime Minister, Sheikh Hamad bin Jas-sim bin Jabr al-Thani, QIA oper-ates through two major invest-ment vehicles. Qatar Holding, incorporated in 2006, is the main vehicle for strategic and direct in-vestments, while Qatari Diar Real Estate Company is the fund’s prop-erty investment arm.

Established in 2005 and with an estimated $35 billion in assets, Qatari Diar has investments in the UK, France, Thailand, Morocco, Egypt, Oman and Syria, among others. Currently the company has more than 49 projects either un-der development or in planning at home and abroad.

Most of QIA’s high-profile in-vestments, however, have been made through Qatar Holding, in-cluding commitments in construc-tion company Hochtief and auto-makers Volkswagen and Porsche. Focusing on long-term gains and taking advantage of growth oppor-tunities, Qatar Holding generally makes long-term strategic invest-ments, mixed with the occasional opportunistic position from time to time.

Spread across different asset classes, including listed securities, alternative assets and private eq-

uity, investments have tended to be more focussed in Europe and Asia, with a few in the US, and include France’s Lagardere Group, Lon-don’s Canary Wharf, Singapore’s Raffles Medical Group, and the UK’s second biggest grocer, Sains-bury’s.

With its eye on the future, QIA has also invested heavily in the clean technology sector, having created in 2008 a €287 million fund for low carbon investment, in collaboration with the UK’s Carbon Trust – an independent, non-profit fund set up by the UK government that provides special-ist support to help businesses and the public sector boost returns by cutting carbon emissions, saving energy and commercialising low carbon technologies.

In March 2010, Qatar Holding signed a letter of intent with Qa-tar Science and Technology Park, Porsche and Volkswagen to launch a series of initiatives covering ar-eas such as education, research and commercial applications of a broad range of technologies, in-cluding both engineering and fuel technology.

Qatar Holding has also shown a particular affinity for financial institutions. The company holds shares in Barclays, Credit Suisse and the London Stock Exchange, in addition to shares in the In-dustrial and Commercial Bank of China and the Agricultural Bank of China.

At the end of the day, the fund’s main mission is to use the excess revenues from Qatar’s oil and gas industry to diversify the national economy, help moderate the effects of fluctuating oil and gas prices, and ensure continued growth after hydrocarbons resources are ex-hausted.

Consequently, Qatar Holding also invests in Qatar, and cur-rently owns shares in Qatar Tel-ecom, Qatar National Bank, the Qatar Exchange and various local banks. Through Qatari Diar, QIA has invested in major infrastruc-ture projects such as Lusail City, the bridge between Qatar and Bah-rain, and in a joint venture with Deutsche Bahn, the development of the national railway network.

Qatar Investment Authority looks for quality

investments around the world

The Qatar Investment Authority owns London’s Shard, the EU’s tallest skyscraper

Qatar set to become

regional tourism centre

Most people visiting Qatar do so for business reasons. However, this is changing as the tiny Gulf state pursues its ambition to be-come a major player on the region-al and international tourism scene by turning itself into a centre for meetings, sports, culture, and lei-sure.

Just how confident the Qatari authorities are about attracting huge numbers of future visitors can be judged by the size of Do-ha’s new international airport, due to open next year. Initially it will cater to 24 million passengers, but further expansion will increase the number to 50 million after 2015. The airport has been designed spe-cifically for the Airbus A380 twin-deck super jumbo, the biggest pas-senger aircraft ever built.

The World Travel and Tourism Council (WTTC) predicts that tourism in Qatar will grow by around 13 percent this year and double over the next 10 years – the fastest growth rate in the indus-try in the Middle East. The Qatar Tourism Authority (QTA) is tar-geting a 20 percent increase in the industry over the next five years.

And that’s ahead of Qatar’s hosting of the 2022 FIFA World Cup, an event that will showcase the country to a TV audience of billions across the globe.

The Qatari government is eager to diversify the economy away from overdependence on hydro-carbons and believes that tourism has enormous potential in this re-gard. This is supported by the in-dustry’s rising contribution to the economy, both directly and indi-rectly – estimated by the WTTC at $5.5 billion last year, and expected to reach $11.25 billion in 2022.

Qatar has invested significantly in the development of its tourism and transport infrastructure, build-ing new hotels, resorts, and cultur-al centers, and the pace of invest-ment will accelerate in the run up to the World Cup. The government plans to spend some $20 billion towards the development of tour-ism projects, and $65 billion on infrastructure to facilitate tourist movement during the event, in-cluding a Metro system for Doha.

Meanwhile, Qatar has been

busy broadening its tourist ap-peal. It has already established a reputation for successfully staging large-scale events – particularly international sporting tourna-ments, attracting large numbers of tennis, golf and athletics fans. Last year, it staged the AFC Asian Cup, and for the mega-championship of 2022 it is building nine spectacu-lar new stadiums.

Cultural attractions in Qa-tar range from museums focus-ing on Arab and Islamic herit-age and art, to the Waqif Art

Centre, Katara Cultural Village, and the iconic Qatar National Convention Centre. Shoppers can head for the traditional souks or buy leading international brands in sleek modern malls.

Business tourism accounted for 72 per cent of the total number of tourists who arrived in 2011, and Qatar is firmly on the map as a destination for meetings, incen-tives, conventions, and exhibi-tions (MICE) tourism. Since open-ing in December last year, Qatar National Convention Centre alone has attracted more than 136,000 visitors hosted to over 200 events, including major international con-ferences.

Overall visitor numbers are still relatively modest compared with some other Gulf nations, but the upward trend is unmistakable and Qatar is determined to grab a ma-jor share of the lucrative regional tourism market.

Last year was the most success-ful yet. According to the QTA, 2011 saw an increase of around 50 percent in visitors from the GCC region, compared to 2010, with some 845,600 arrivals. Interna-tional tourism figures were also impressive, with a 12 per cent in-crease. Asian tourists accounted for 58 per cent of the total, while tourism from European countries was up by 15 percent.

Doha’s hotels enjoyed a record year in 2011, with revenue from four and five star hotels exceeding $1.3 billion.

The number of hotels in Doha has doubled since 2010 to around 12,000. Eight new hotels opened last year and more are under con-struction. Famous international brands like St. Regis and Hilton have recently joined brands like W, Four Seasons, Marriott, and Sheraton in the capital.

Hotel occupancy rates across the country peaked at 85 per cent during the recent Eid Al Adha holiday, held at the end of the Hajj, the annual Muslim pilgrim-age to Mecca. With more than 10,300 visitors arriving from all GCC countries for the celebra-tions, Qatar appears to be on track to become one of the main tourist spots for GCC citizens.

Forecast to be the fastest growing tourist destination in the Middle

East, Qatar is investing heavily in new tourism infrastructure

In 2011, European

tourist arrivals

were up by 15

percent, and GCC

visitors grew by 50

percent

Tourism has

great potential

to diversify

Qatar’s economy

away from

hydrocarbons.

Already, the

sector contributes

directly and

indirectly, some

$5.5 billion

Despite Qatar’s fast modernisation, traditions remain alive and well, and continue to entice tourists


WEDNESDAY, NOVEMBER 28 20128 QATAR

Until now, Qatar’s rapid economic progress has largely been centred around the exploitation of vast amounts of oil and gas reserves that the Arab state boasts. With speedy growth comes the challenge of pre-serving cultural traditions and this is a problem that confronts many societies in a swiftly globalising and increasingly connected world.

Qatar’s escalation has created strains between the old and the new in almost every aspect of daily life. In the modern, highly-competitive world, the capitalistic approach to business often clashes with tra-ditional relationships and values. Moreover, the greater emancipation and variety that complement eco-nomic and social progress can pose challenges to deep-rooted social val-ues cherished by a society.

Qatar is trying to mould mod-ernisation around local culture and prove that modern life and tradition-al values can indeed be compatible, and it is doing this through the Qatar National Vision 2030 (QNV 2030) programme.

The QNV2030 outlines four guid-ing principles, on the basis of which the state aims to create a sustainable economy and enhance the standard of living of its people. Therefore up until the year 2030, expansion in both the public and private sectors will be centred on human, social, economic and environmental devel-opment.

The main objectives of the QNV2030 are to create a society that is educated, capable of playing a key role in forging global partner-ships, and one that maintains a bal-ance between economic and social development.

In addition to this, Qatar’s govern-ment feels that community develop-ment plays a vital part in obtaining the targets it sets. Any advancement in business or science and technol-ogy that fails to engage with and nurture culture and art will not be fully beneficial to the state – a strat-egy that highlights the importance of culture in Qatar’s present and future.

The Katara Cultural Village will play a significant role in this cultural development. It will exhibit art from Qatar and all around the world, as part of the state’s drive to nurture natural talent by providing Qataris with the opportunity to be inspired by art, both old and contemporary.

In an ever-changing and digital-ised global world, Katara is eager to offer a platform where Qataris can keep hold of their roots and herit-age, while still embracing diversity and rejoicing in similarities with the cultures of the world.

Recently Katara and Blooms-bury Qatar Foundation Publishing (BQFP) announced a partnership to initiate and support cultural activi-ties through the development, pro-duction and circulation of cultural publications.

According to Hanouf Al-Buain-ain, Director of BQFP, Qatar wants to bring culture out to the broader consciousness, and at the same time develop a vibrant literacy publishing scene within the state. He foresees that this joint venture will result in Qatar producing a number of books in English and Arabic in the imme-diate future. He also thinks that the

Culture as important pillar for growth Qatar strives to develop the nation’s potential whilst maintaining culture at the nation’s core, thereby blending modernity with traditions

One of the first sights to be encoun-tered by travellers arriving in Doha in the near future will be the new National Museum of Qatar.

Currently being built at the south end of the Corniche, the striking complex of disk-shaped pavilions will celebrate the culture, heritage and future of Qatar and its people.

The innovative design is the work of renowned French architect Jean Nouvel, winner of the prestigious Pritzker Archi-tecture Prize. Hyundai Engineering & Construction of South Korea was award-ed the $434 million contract by Qatar Museums Authority last year, and the opening is scheduled for December 2014.

While the look of the new museum is uncompromis-ingly modern, its scattering

of intersecting disk-like components are designed to echo the petals of the de-sert sand rose. Nouvel, whose declared intention is to reflect the country’s van-ishing Bedouin culture, describes it as “a modern-day caravanserai.”

Built from locally sourced concrete

and steel, the museum will comprise 430,000 sq ft of indoor space, includ-ing 86,000 sq ft of permanent gallery space, 21,500 sq ft of temporary gallery space, a 220-seat auditorium, a 70-seat food forum and TV studio, two cafes, a restaurant, and a museum shop. Sur-rounding it will be a 1.2 million sq ft landscaped park in the style of a Qatari desert landscape.

The restored Fariq Al Salatah Palace, which has served as Qatar’s national museum since 1975, is integrated into the design. Originally built in the early 20th century by Sheikh Abdullah bin

Jassim Al Thani, and for 25 years the seat of government, the pal-

ace is being preserved as the heart of the new museum.

“At this unpar-

alleled new institution, Qataris will be able to discover more about their im-mediate ancestors and their roots in the region, learn about the formation of Qatar’s early cities, and above all be ex-posed to the historical, material culture and intangible heritage represented in the collections,” says Peggy Loar, the National Museum’s director.

However, it is not just Qatari citi-zens that the new museum is intended to attract.

Qatar, which already boasts a Muse-um of Islamic Art, an Orientalist Muse-um, and a Museum of Modern Islamic Art, is targeting 20 per cent growth in tourism over the next five years, and culture will play an important part in pulling in visitors, particularly from other GCC states, such as Saudi Arabia, Kuwait, and the United Arab Emirates.

Qatar’s new national museum aims to attract Qataris and tourists

A celebration of culture

Qatar has placed culture and heritage at the core of its develop-ment strategy for the future, thus harmoniously blending tradition and modernity

Katara:

living culture

Realised out of a vision to estab-lish Qatar as a cultural beacon of the Middle East, the cultural vil-lage at Katara is a world-class exhibition space that has been designed to spur the participation of Qataris in cultural activities and encourage greater exploration of the emirate’s rich heritage.

A true nation-building endeav-our, the $82-million project is held as a key contributor to the social and human development of the country.

Built on reclaimed coastal land between Doha’s West Bay and The Pearl-Qatar, just to the north of the capital’s city centre, Katara includes heritage centres, librar-ies, art galleries and other aca-demic facilities, in addition to re-tail outlets, coffee shops, museum facilities and market areas.

Katara had a soft opening in October 2010 during the Doha Tribeca Film Festival (DTFF).

According to Marcio Barbo-sa, managing director of Katara and former joint director at UN-ESCO, the cultural village has the challenge of, on one hand, preserving the traditions and his-toric values of the country and, on the other, “offering cultural opportunities” — modern ones through different manifestations, like music, art, theatre and cin-ema, among others. “The idea is to show that, in culture, the country has a strategy of coexist-ence of the ancient and the new,” he says.

Many Qatari organizations already have their offices at Ka-tara, including the Qatari Society for Engineers, Qatar Fine Arts Society, Visual Art Centre, Qa-tar Photographic Society, Child-hood Cultural Centre, Doha Film Institute, and the Qatar Music Academy.

The 247-acre cultural village features a massive open amphi-theatre, opera house, cinema that can double as a drama theatre, a multipurpose hall, beach, handi-crafts souq, book market, inter-national restaurants and cafes,

and ample space for visitors to stroll around the different areas of the project.

The themed restaurant area has eateries that are exclusive to the Middle East and Katara’s mina-ret centre is based around three towers, one of which – a hotel – will be Qatar’s tallest.

The purpose-built cultural village of

Katara has already hosted various high-

profile events and spurred many Qatari

organisations to set up there

“The idea is to

show that, in

culture, the country

has a strategy of

coexistence of the

ancient and the new.”

Marcio Barbosa, Managing Director of Katara

partnership will initiate a common cultural awareness that will allow Qataris to appreciate cultures from across the world and will ultimately reinforce the development of a crea-tive and innovative Qatar, as well.

A prominent event on the cul-tural itinerary is the Doha Tribeca Film Festival, the annual cultural showpiece of the Doha Film Insti-tute. Held this year from 17th-24th November, the festival showcased homegrown talent with a selection of 19 films by local filmmakers, including nationals and expatriates based in the country.

This year marked the largest ex-hibition of Made in Qatar films, underlining the significant strides achieved by Qatar’s emerging film industry, with 15 premieres being shown as part of the overall festi-val line-up. Another 87 films were screened from across the globe. The films will compete for the Made in Qatar development award of $10,000, awarded by an independ-ent jury.

The Qatari cultural revolution now also has a website to act a refer-ence point. The Minister of Culture, Arts and Heritage HE Dr Hamad bin Abdulaziz al-Kuwari recently launched the website for the ‘Qatar cultural gate.’ The project forms part of the Ministry’s plan to improve its services to keep pace with the devel-opments in the field of information technology.

The Emir of Qatar accepting the honour to host World Cup 2022

qatar ftd low resolution dec. 4

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