GCC bonds, sukuk issuance surges 38% to $75bln for H1

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The GCC fixed income market has witnessed significant growth during the first half with the primary debt issuances of bonds and sukuk soaring to $75.5 billion from $54.8 billion last year, thus representing a 38% increase, according to a report by Kuwait Financial Centre (Markaz).

There were 173 primary debt issuances including fixed and floating rate tranches compared to 130 issuances in H1 last year.

Saudi-based issuers dominated the regional market leading the GCC Bonds and Sukuk market during the first half with a total of $37 billion through 44 issuances, representing 49% of the total value raised in the GCC, stated Markaz in its Fixed Income Report.

The UAE issuers came second raising $20.6 billion with 64 issuances, representing 27%, followed by Qatar with a total of $10.5 billion through 39 issuances, representing 14%.

Bahraini entities witnessed 4 issuances raising $3 billion representing 4% of the market, while Omani entities raised a total of $1.7 billion representing 2% of the total new amount issued and Kuwaiti Entities with $2.6 billion through 15 issuances, representing 4% of the market.

Issuances by sovereign entities in the GCC made up 55% of the total value of GCC primary issuances during H1 2024, amounting to $41.5 billion and up 77% from H1 2023.

Primary issuances by corporates amounted to $34 billion during the half constituting 45% of the total value of GCC primary issuances and marking a growth of 8% compared to H1 2023.

According to Markaz, conventional issuances increased by 56% in H1 compared to the same period last year, raising a total of $48.8 billion representing 65% of the total value of primary issuances in the GCC.

On the other hand, sukuk issuances amounting to $26.6 billion made up 35% of the total value of primary issuances during the six-month period, thus recording a 14% increase from the same period last year.

Sectorwise, Markaz said the government sector accounted for the largest amount of primary debt issuances by value, raising a total of $41.5 billion, or 55% of the total value of issuances in the GCC in H1 2024, followed by the financial sector (including quasi-government entities) that raised a total value of $28.8 billion, representing 38% of the total amount issued.

The size of GCC bonds and sukuk primary issuances during the half ranged from $545,000 to $5 billion. Issuances with principal amounts greater than or equal to $1 billion raised the largest amount totaling $48.7 billion, representing 65% of the total primary issuances, it stated.

According to Markaz, the US dollar-denominated issuances led the primary market in H1 2024, raising a total of $57.5 billion or 76% of the total value of GCC primary issuances. This was followed by Saudi Riyal denominated issuances that raised $8.5 billion or 12% of the total value of issuances in the GCC, it added.-TradeArabia News Service