The US bond yields which had which had touched 3% this month came down on expectation of modest tapering by the US Fed this month. The recent US job data have mainly contributed to this expectation. In recent months the emerging economies bonds witnessed selling on account of concerns of US Fed tapering. Corporate spreads of emerging economies bonds have also got widened up on concerns of fed tapering. Institutions may look for hedging their investment books taking into consideration the Fed action.

The Global bond markets witnessed issues exceeding $2.6trillion for the year to date however the Global bond issues were down in the 1st half of 2013 when compared to the same period last year. GCC Bond an issue was more than $40bn in 2012 out of which close to 50% came from Islamic bonds. In 2013 GCC bond issues have reached more than $27bn. The major Conventional bonds in 2013 were issued by Emirate of Abu Dhabi, Emirate of Dubai, Investment Corporation of Dubai, Qatar telecom and Qatar National Bank. The major Islamic bonds in 2013 were issued by Saudi Sovereign, Sadara Basic Services, Investment corporation of Dubai and Dubai Islamic bank. Qatar Central Bank has come with Quarterly bond issues since March 2013.

The Global sukuk sales exceeded $46bn in 2012 and in current year it has touched $23bn. GCC issues have contributed more than 50% of the Global sukuk till date. Global sukuk deals are down in 2013 when compared to 2012.There is surge in Conventional and drop in Islamic bond issues in the 1st half of 2013 when compared to same period in 2012 in the GCC region. The GCC Sovereign yields witnessed a surge on account of Syria tensions in the last fortnight however came down after the tensions eased. The 5 Year Sovereign CDS of Qatar at end of last week was at 70.9 Basis points, Saudi Arabia :64.73 Basis points, Dubai:210 Basis points, Abu Dhabi : 61.5 Basis points and Bahrain: 231.6 Basis points respectively.

Since June 2013 Qatar exchange announced the trading of government bonds issued by Qatar Central Bank. It was a step towards launching a market for corporate bonds. Bond being a new trading instrument in Qatar exchange, there is a need to hold seminars and knowledge sharing sessions. The development of yield curve is necessary for bond market. Fixation of benchmarks for bonds is also essential. To address hedging requirements the development of interest rate derivatives market also becomes vital.