Markaz Report: GCC Fixed Income markets sees USD 37.7 billion in primary issuances during Q1 2024 representing a 33% increase from the same period last year

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Kuwait City, May 19: In its Fixed Income Report, Kuwait Financial Centre “Markaz” states that Primary debt issuances of Bonds and Sukuk in the Gulf Cooperation Council (“GCC”) Countries amounted to USD 37.7 billion during Q1 2024 compared to USD 28.4 billion raised in Q1 2023, representing a 33% increase. During the quarter, there were 77 primary debt issuances including fixed and floating rate tranches compared to 68 issuances in Q1 2023.

Issuances by Geography: Saudi-based issuers led the GCC Bonds and Sukuk market during the quarter, raising a total of USD 23.2 billion through 22 issuances, representing 62% of the total value raised in the GCC, followed by UAE issuers which raised USD 6.2 billion with 28 issuances, representing 16%. Qatar entities raised a total of USD 4.2 billion representing 11% while Bahraini Entities witness 2 issuances raising USD 2.0 billion representing 5% of the market. Omani entities raised a total of USD 1.3 billion representing 3% of the total new amount issued during the quarter. Kuwaiti Entities raised a total of USD 1.0 billion through 1 issuance representing 3% of the market.

Sovereign vs. Corporate: Issuances by Sovereign entities in the GCC made up 48% of the total value of GCC primary issuances during Q1 2024, amounting to USD 18.1 billion and up 57.2% from Q1 2023. Primary issuances by Corporates amounted to USD 19.6 billion during the quarter constituting 52% of the total value of GCC primary issuances and marking a growth of 16.3% compared to Q1 2023.

Conventional vs. Sukuk: Conventional issuances increased by 20.4% in Q1 2024 compared to the same period last year, raising a total of USD 27.9 billion representing 74% of the total value of primary issuances in the GCC. On the other hand, Sukuk issuances amounting to USD 9.9 billion made up 26% of the total value of primary issuances during Q1 2024 and recording a 87.9% increase from the same period last year.

Sector Segmentation: The Government sector accounted for the largest amount of primary debt issuances by value, raising a total of USD 18.1 billion, or 48% of the total value of issuances in the GCC in Q1 2024, closely followed by the financial sector (including quasi-government entities) that raised a total value of USD 16.7 billion, representing 44% of the total amount issued.

Maturity Profile: Issuances with tenors of less than 5 years (LT5 years) dominated the GCC debt capital markets by total value, with a total of USD 16.5 billion, or 44% of the total value of issuances. Issuances with tenors of 5-10 years came in second with a total value raised of USD 13.4 billion, or 36% of the total value of issuances.

Issue Size Profile: The size of GCC Bonds and Sukuk primary issuances during the quarter ranged from USD 4.0 million to USD 4.8 billion. Issuances with principal amounts greater than or equal to USD 1 billion raised the largest amount totaling USD 23.7 billion, representing 63% of the total primary issuances.

Currency Profile: US Dollar-denominated issuances led the GCC Bonds and Sukuk primary market in Q1 2024, raising a total of USD 32.6 billion or 86% of the total value of GCC primary issuances. This was followed by Saudi Riyal denominated issuances that raised a total of USD 2.0 billion or 5% of the total value of issuances in the GCC.

Rating: In Q1 2024, a total of 85% of GCC primary Bonds and Sukuk issuances (in terms of value) were rated by either one of the following rating agencies: Standard & Poor’s, Moody’s, Fitch and/or Capital Intelligence, of which 76% were rated within the Investment Grade.

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