Bond, sukuk issues in Gulf touch $119b

Muscat: Private firms and central banks in the Gulf region have issued bonds and sukuk worth $118.65 billion last year, a growth of 37.2 per cent over the previous year, according to Markaz, Kuwait based think-tank institute.
A large part of the increase is attributable to the Saudi Arabian sovereign issuances, first of such issuances since 2007.
The Central Bank Local Issuances are Fixed Income securities issued by GCC central banks in local currencies and with short maturities of less than one year for the purpose of regulating levels of domestic liquidity. A total of $53.50 billion was raised by the GCC central banks, namely by the Central Bank of Kuwait, Bahrain, Qatar, and Oman. The Central Bank of Kuwait raised the highest amount with $23.35 billion, representing 43.64 per cent of the total amount through 65 issuances, followed by the Central Bank of Qatar, which raised a total of $15.12 billion, a reduction of 21.43 per cent from $19.24 billion raised in 2014.
The GCC bonds and Sukuk market is composed of bonds and sukuk issued by GCC sovereign and corporate entities for financing purposes and denominated in local and foreign currencies. A total of $65.15 billion was raised in the GCC bonds market in 2015, a growth of 82.40 per cent from $35.72 billion raised in 2014.
The report stated that a total of $44.38 billion was raised in the second half 2015, 113.58 per cent higher than $20.78 billion raised in the firsthalf of 2015, driven by new Saudi sovereign issuances which amounted to $30.65 billion.
Saudi Arabia was the leading issuer in 2015, raising $35.01 billion through 15 issues and representing 53.73 per cent of the total value raised by the GCC issuers during the year. In terms of the frequency of issuances, UAE maintained its position as the dominant issuer with 149 issuances during 2015. The UAE based issuers raised $18.52 billion during 2015, representing 28.42 per cent of the total value. Bahraini entities represented 7.15 per cent of the total issuances, raising $4.66 billion through 7 issues. Qatari entities raised $2.04 billion while Omani entities raised $3.77 billion. National Bank of Kuwait was the only issuer from Kuwait.
The total value raised by corporate entities declined by 17.51 per cent from $32.97 billion in 2014 to $27.20 billion in 2015. During 2015, sovereign issuances dominated the majority of the amount raised in the GCC bonds market, with $37.96 billion or 58.3 per cent of the total amount raised through 16 issues. Saudi Arabia raised SAR115 billion ($30.65 billion). Bahrain issued a 10 year $1.10 billion bond priced at 7 per cent and a 5 year $1.15 billion bearing a coupon of 5.875 per cent.
The conventional issuances raised $55.59 billion, or 85.32 per cent of the total amount raised in GCC bonds and sukuk market during 2015.This was an increase of 109.79 per cent as compared to 2014. Sukuk issuances witnessed a modest growth of 3.71 per cent from $9.22 billion in 2014 to $9.56 billion in 2015.
Government sector accounted for the largest amount raised during the year, with $37.96 billion representing 58.26 per cent of the total amount raised, through 16 issuances. The Financial sector followed with $22.87 billion (35.11 per cent) raised through 179 issues.