Saturday 20 / April / 2024
Muscat: The aggregate primary issuance of bonds and sukuk by GCC entities, including central banks local issuances, GCC sovereign and corporate issuances, totalled US$153.74 billion in 2018, a 11.7 per cent decrease from the total amount raised in 2017. Saudi entities were the top issuers in terms of total value issued.
This was highlighted by Kuwait Financial Centre (Markaz), in its recent research report titled GCC Bonds & Sukuk Market Survey. The report analysed the trends pertaining to bonds and sukuk issuances in the Gulf Cooperation Council (GCC) region during 2018.
Central bank local issuances (CBLIs) are issued by GCC central banks in local currencies and with short maturities for the purpose of regulating levels of domestic liquidity. During 2018, a total of US$61.87 billion was raised by the GCC central banks, namely by the Central Bank of Kuwait, Bahrain, Qatar, and Oman. (The only publically available information is from the Central Bank of Bahrain, the Central Bank of Kuwait, the Central Bank of Oman, and the Central Bank of Qatar). The Central Bank of Kuwait raised the highest amount with US$30.43 billion, representing 49.18 per cent of the total amount raised by CBLIs through 42 issuances, followed by the Central Bank of Bahrain, which raised a total of US$15.42 billion.
Bonds & sukuk market
A total of US$91.87 billion was raised in the GCC sovereign and corporate bonds and sukuk market in 2018, a decline of 11.89 per cent from US$104.26 billion raised in 2017.
Second quarter of 2018 recorded the highest value of GCC issuances with total value of US$36.08 billion through 90 issuances, while fourth quarter was the least active with total value of issuances of US$13.13 billion through 61 issuances.
Geographical allocation
Saudi Arabia based issuers led the GCC in 2018, raising a total of US$28.51 billion through 22 issuances and representing 31 per cent of the total value raised in the GCC, followed by UAE with 30 per cent and Qatar with 24 per cent. Kuwaiti issuances represented 1.4 per cent of the total issuances, raising US$1.3 billion through 8 issuances. Total value of Omani issuances was US$10.8 billion through 10 issuances representing 12 per cent of total GCC issuances. Qatari issuances totaled US$22.23 billion representing an increase of 259.22 per cent compared to its level in 2017. Bahraini issuances represented 2.2 per cent of total GCC issuances with US$2.02 billion through 4 issuances.
Sovereign Vs Corporate
Sovereign issues contributed 50.3 per cent to the overall market with a total value of US$46.19 billion as compared to US$65.28 billion in 2017. Total value raised by corporate entities in 2018 increased by 17.19 per cent, to US$45.68 billion in 2018 from US$38.98 billion in 2017. Saudi Arabia's government raised US$23.88 billion out of which US$10.88 billion was through domestic bonds and US$13 billion through US Dollar denominated Bonds and Sukuk. Qatar, Oman, Sharjah and Bahrain governments raised US$12 billion, US$8billion, US$1 billion and US$1 billion respectively. Kuwait was the only GCC sovereign entity not tapping the international bond markets in 2018.
Conventional Vs Sukuk
Conventional issuances were lower by 16.4 per cent last year as it raised US$68.09 billion, representing 74.11 per cent of the total amount raised. During 2018, Sukuk issuances raised US$23.78 billion, 4.10 per cent higher as compared to US$22.85 billion raised in 2017 and represented a share of 25.89 per cent of the market in 2018.
Sector allocation
Government sector accounted for the largest amount raised during 2018, with US$46.19 billion representing 50.3 per cent of the total amount raised as compared to US$65.28 billion issued in 2017. The Financial sector followed with US$27.20billion (29.6 per cent of total market) raised through 250 issues.
