Kuwait bonds, sukuk from 2003-09 at $99.7 bln

KUWAIT CITY, Oct 25: Kuwait Financial Centre “Markaz” in its recent research on the GCC Fixed Income Market has highlighted the trends in the Kuwaiti bonds and sukuk market during the period from 2003-2009.
During the period covered in the survey, Kuwait’s total new issuances of bonds and sukuk amounted to $99.7 billion, representing 40 percent of the entire GCC issuances during the same period. Government issuances, issued entirely by the Central Bank of Kuwait, represented 92.9 percent of the aggregate Kuwaiti market with $92.6 billion.
This in effect, dictated the dominant form of issuances, as well as the dominant currency for the aggregate market: Conventional bonds constituted 97.9 percent of the aggregate market while Kuwaiti Dinar denominated issuances raised 94.3 percent of the aggregate market.

CBK Issuances
CBK issued 1) Treasury Bills, which are debt obligations with maturities of less than one-year and no periodic interest payments, 2) Central Bank Bonds, which are debt obligations with maturities of less than one-year carrying a fixed coupon rate, and 3) Treasury Bonds which are debt obligations with maturities greater than one-year with a fixed coupon rate.
In 2009, the CBK issuances witnessed the highest frequency with 51 issuances and raised the second largest amount with KD 4.1 billion ($14.7 billion). The CBK’s peak issuance amount was raised in 2003 with KWD4.4 billion ($15.5 billion).

Corporate Issuances
During the period, Kuwaiti corporates raised a combined total of $7.1 billion through 65 issuances. The Kuwaiti corporate bonds and sukuk market peaked during 2006 as $2.1 billion was raised through 11 issuances, representing 2.02 percent of Kuwait’s GDP during that year.
Throughout the period, Conventional issuances raised 70.3 percent of corporate issuances total value, USD Dollar denominated issues raised 63.8 percent while 74.0 percent of the total number of corporate issuance was rated.

Tenors ranged from two to 15 years, with the five-year tenor constituting 80.0 percent of the total number issued with 52 issuances raising $5.6 billion, followed by three years tenor raising $0.55 billion, constituting 12.3 percent of the total number issued.
During the period, various sectors tapped into the Fixed Income Market including the Financial Services sector, Conglomerates, the Real Estate sector, the Transport sector, the Construction sector, and the Oil and Gas sector. The Financial Services sector recorded the highest number of issuances with 39 issues and raised the largest amount with $4.2 billion, representing 59.1 percent of the total amount raised throughout the period.

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