Fixed deposits of Qatar banks surge by 71pc
December 30, 2013 - 10:00:39 am
by Sachin Kumar
Doha: Fixed deposits of banks in Qatar have surged 71 percent in the last five years reflecting that individuals turned to safety of their hard earned money when stock market turned volatile. According to the Qatar Central Bank data fixed deposit of banks in Qatar surged to QR72.87bn at the end of 2012 from QR42.58bn at the end of 2008.
The jump in fixed deposits shows the flight of capital towards safety after the crash in stock market in 2008 due to global meltdown.
Investors burnt their fingers in 2008 when Qatar stock market fell sharply following the crash in stock markets around the world. Qatar Exchange index, which crossed 12000 mark in 2008 and touched the peak of 12433 on June 9, fell sharply to 4335.85 the same year following the sell-off in major global financial markets.
After that stock market has gradually moved up but it has remained volatile keeping investors on their toes. Qatar Exchange has also been unable to live up to the expectations of investors in providing returns. The index has not been able to cross the peak of 12433 seen during June 2009 and is trading at 10360.
Due to the volatility in the stock market, investors are putting their money in fixed deposits of banks for safety. In the past years, money is steadily flowing into the fixed deposits. In 2009 when stock markets crashed, individuals rushed to banks to park their money and fixed deposits increased by 20 percent to QR51.07bon at the end of 2009 from QR42.58bn in 2008. The rush continued the following year also as fixed deposit grew by 27 percent to QR64.89bn in 2010. After that the deposits grew by 5 percent to QR68.27bn in 2011 and then by 6.7 percent to QR72.87 bn in 2012.
Apart from the fixed deposits, money has also gone into the saving accounts or demand deposits. In the last five years, saving deposits have jumped 102 percent to QR37.17bn at the end of 2012 from QR18.43bn showing that individuals kept more money to meet their routing expenditure.
Rising savings is good news as the recent Saving Index Report revealed that 72 percent respondents from Qatar said that they could not save as much as they had planned.