Qatari investors flex financial muscle (By IFN)

QATAR: The state’s investors have been on a spending spree of late, flexing their financial muscle in transactions that have spread the government’s reach from China to the UK.

In its latest deal, Qatar Holding, a unit of sovereign wealth fund Qatar Investment Authority, acquired a 22% interest in CITIC Capital Holdings, an investment firm partly owned by sovereign wealth fund China Investment Corporation. Financial details of the transaction were not disclosed. The acquisition follows shortly after Qatar Holding announced that it will buy 20% of UK airport operator BAA for GBP900 million (US$1.42 billion).

Qatar is estimated to own US$100 billion-worth of investable funds; and its two latest deals form the tip of the iceberg of a slew of transactions that have taken place since 2007, with an estimated GBP20 billion (US$31.59 billion) spent in the UK alone in the last several years.

Across the globe, Qatar-related transactions include the Shariah compliant funding of The Shard in London by a consortium of Qatari investors, a purchase of 20% of the London Stock Exchange in 2007 and a US$857 million acquisition of the entire stake in luxury retailer Valentino by Mayhoola for Investments, an investment firm linked to Qatari royals.

Its financial might has already opened up room for Islamic finance. In addition to the financing of The Shard, Qatari names have emerged across Dealogic’s league tables for the last 12 months. As at the 23^rd August 2012, Qatar-issued Sukuk ranked fourth in Dealogic’s data for Sukuk volume by issuer nation, with US$4 billion-worth of Sukuk sold compared to just US$800 million a year earlier.

Furthermore, the Barzan Gas project in Qatar tops Dealogic’s table for Islamic financings, under a facility worth US$5.44 billion.

The state’s banks, both conventional and Islamic, are also fairly represented in Dealogic’s league tables for top managers of Sukuk and Islamic finance mandated lead arrangers and bookrunners. As at the 23^rd August, Barwa Bank, Qatar Islamic Bank, Qatar International Islamic Bank, Masraf Al Rayan, Mashreqbank and QInvest have arranged US$976 million-worth of Islamic financing, with QInvest ranked the top Islamic finance bookrunner for a deal worth US$467 million.

In a report, Kuwait’s Arab Investment and Export Credit Guarantee Corporation said that Qatar’s total foreign and domestic investment is expected to surpass US$300 billion in the next six years. Additionally, with the 2022 FIFA World Cup to be held in Qatar still looming, there can be no other way but up for Islamic finance transactions as the state continues on its spending spree.