DOHA: Qatar Exchange, as part of its ongoing campaign to promote awareness among investors about the recently opened bond market, organised a free educational seminar on bonds trading and the importance of such investments tools as one of the products offered for trading on the stock exchange along with stocks, a press statement said yesterday.
The two-day seminar offered presentations in both English and Arabic on Wednesday and Thursday, respectively.
The seminar was attended by a group of investors and interested parties. These seminars are part of a series of free educational seminars geared towards retail investors in Qatar.
It shed light on the bond market and how bonds are traded in the presence of a group of existing investors in the stock market. The seminar comes at the beginning of the Stock Exchange campaign to educate investors about the recently launched bond market.
Roger Warnock from the CEO Office of Qatar Exchange gave a presentation on the types of bond, investment advantages, pricing mechanism, and yield calculations. He explained that the bonds market provides investors with access to additional investment products, rather than being limited to a single investment tool as is the case with stocks. Bonds will be traded through brokerage firms and the pricing will be through the mechanism of supply and demand, Warnock noted.
He explained that bond prices are influenced by prevailing market interest rates and will usually go up if there is a decrease in those rates, adding that bond prices are inversely proportional to yield, and capital gains can be made if interest rates should fall.
In the introductory presentation, Warnock stated that bonds are an important funding channel used by governments, companies and institutions to ensure the necessary liquidity to fund their projects. These bonds also provide protection for investors’ portfolios by giving them the ability to diversify risk as bonds are deemed to carry less risk and provide safe periodic income.
In his presentation, Warnock also compared between bonds and equities, saying that the returns in stocks are unspecific dividends, while for bonds the return is a fixed percentage paid on a semi-annual basis.
He highlighted that bonds have been traded in Qatar for some years, through some of the banks and financial institutions, adding that market expectations for a growing number of government and private projects requiring access to low-cost funding may result in an increase in bond issuance which will then be made available for trading on Qatar Exchange. Warnock also stressed that bond trading requires increased awareness among individual investors and financial market professionals, to provide a strong foundation of financial markets knowledge within the investment community.
In his concluding remarks, he said that investors should be aware that they will receive specific semiannual profits besides the original principal amount which will be repaid at the end of the bond period, adding that the risk of bonds trading is less when compared with stocks on the grounds that these bonds are issued by Qatar Central Bank. Thus, this type of investment is considered safe and profitable.
It is worth mentioning that bonds are traded in the market through the existing licensed brokerage firms and using the existing trading system currently used for stock trading. Information about the bonds and the trading in bonds is available on the QE website and through regular information channels.
The Peninsula
