DOHA: A total of $174.17bn was raised in the GCC aggregate bonds and sukuk market during 2017, an increase of 3.96 percent over $167.54bn raised in 2016. Out of which, $69.90bn was raised by the GCC Central Banks local issuances (CBLI) whereas $104.26bn was raised by GCC sovereign and corporate issuance. GCC aggregate bonds and sukuk market includes GCC Central Banks Local Issuances in addition to GCC Sovereign and Corporate Issuances.
According to Kuwait Financial Centre’s (Markaz) ‘GCC bonds and sukuk market’ research note, an estimated 73.3 percent of GCC bonds and sukuk issuances (in value terms), with an aggregate value of $76.46bn were listed on exchanges in 2017. International exchanges accounted for 99 percent of such listings while regional exchanges recorded listing of 4 bonds and sukuk with a total value of $0.89bn. Dublin continued to be the most sought after exchange as it listed 71.39 percent of all the listed issuances during the year.
The S&P MENA Bonds and Sukuk Index posted a gain of 4.56 percent in 2017, (4.003 percent in 2016) with total return increasing from 114.85 on 31st December 2016 to 120.19 on 29th December 2017. The index recorded the lowest value around the beginning of the year on 3rd January 2017 when it reached 114.94, while it recorded its highest value of 120.59 on 8th September 2017. Year-on-year, the Index yield increased from 3.38 percent to 3.40 percent. The index recorded its minimum yield during the year of 3.08 percent on 2nd June 2017 while it recorded its maximum yield of 3.43 percent on 10th November 2017.
A total of $69.90bn was raised through GCC Central Banks Local Issuances (CBLIs) during 2017 through 237 issuances, a growth of 7.37 percent from $65.10bn raised during previous year through 254 issuances. Conventional issuances totaled to $63.45bn making up 90.7 percent whereas sukuk’s totaled to $6.43bn, making up 9.3 percent of the GCC CBLI’s.
During 2017, Central Bank of Kuwait (CBK) continued to be the leading issuer among GCC Central Banks with 70 issues raising KWD10.93bn ($36.18bn), lower by 3.8 percent as compared to KWD11.35bn ($37.13bn) it raised in 2016. Similar decline was recorded for Central Bank of Bahrain (CBB) which raised BHD5.39bn ($14.33bn), lower by 5.9 percent from previous year. Central banks of Oman (CBO) and Qatar (CBQ) increased their issuances in 2017, raising OMR3.45bn ($8.9bn) and QR37.94bn ($10.43bn) respectively and posting an increase of 77.1 percent and 35.7 percent as compared to 2016.
The total value of primary issuances in the GCC bonds and sukuk market, among those include GCC sovereign and corporate issuances and does not include CBLIs, reached $104.26bn, representing an increase of 1.78 percent over $102.44bn raised in 2016. The number of issuances decreased from 309 in 2016 to 280 issuances in 2017, a decline of 9.39 percent while the average size per issue increased by 12.3 percent from $332m in 2016 to $372m in 2017.
On a quarterly basis, the fourth quarter of 2017 recorded the highest value of issuance with $39.44bn raised through 59 issuances as the sovereigns tapped international and local debt markets. Primary issuance during the third quarter was the most subdued as $17.87bn was raised through 45 issuances.
Breakdown shows Qatari entities raised $6.18bn from 62 issuances making up 5.9 percent of the market. Effects of the regional crisis were apparent as the Qatari primary issuances dropped by 67.8 percent compared to $19.22bn raised in 2016. Qatar was the only GCC sovereign entity not tapping the international bond markets in 2017.
