GCC Bonds and Primary Sukuk Issuances Drop

today 08 August 2015 GMT

Year on Year Decline

The aggregate primary issuance of bonds and sukuk by GCC entities, including Central Banks, totalled USD48.13 billion in H1 2015, a 15.19% decrease from the total amount raised in H1 2014.

A report published by the Kuwait Financial Centre “Markaz” highlighted the trends pertaining to aggregate issuances in the GCC region during H1 2015.

Central Bank of Kuwait Major Issuer of Local Issuances

In the first half of 2015, the Central Bank of Kuwait raised USD12.85 Billion via fixed income instruments which represented just under half of Central Bank Local Issuances (CBLI) across the GCC.

CBLI are Fixed Income securities issued by GCC central banks for the purpose of regulating levels of domestic liquidity. During H1 2015, a total of USD28.29 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 USD12.85 billion, representing 48.8% of the total amount raised by CBLIs through 36 issuances, followed by the Central Bank of Bahrain, which raised a total of USD6.69 billion, 47.13% higher from USD4.55 billion raised in H1 2014.

The GCC Sukuk and Bond Market

The GCC bonds and Sukuk market is composed of bonds and sukuk issued by GCC Sovereign and Corporate entities (including Government related entities GREs and Financial Institutions FIs) for financing purposes and denominated in local and foreign currencies. A total of USD19.83 billion was raised in the GCC bonds market in H1 2015, a decline of 19.29% from USD24.57 billion raised in H1 2014.

Key Points

  • Issuances by UAE entities raised the largest amount in GCC Bonds & Sukuk market in H1 2015, representing 75.6% of the total amount, or USD14.99 billion, and were the most active in terms of issuance frequency with 99 issuances.

  • During H1 2015, corporate issuances (which includes GREs and FIs) dominated the majority of the amount raised in the GCC bonds market, with USD18.83 billion or 95% of the total amount raised. The sole sovereign issue was a 10 year USD1.0 billion bond issued by the emirate of Ras al Khaimah bearing a coupon of 3.094%.

  • Conventional issuances raised USD15.01 billion, or 75.71% of the total amount raised in GCC bonds and sukuk market during H1 2015. This was a decline of 16.69% as compared to H1 2014. Sukuk issuances shrunk by 26.45% from USD6.55 billion raised in H1 2014 to USD 4.82 billion raised in H1 2015.

  • As of 30 June 2015, the total amount outstanding of corporate and sovereign bonds issued by GCC entities was USD242.04 billion. Corporate issuances constituted the majority of total amount outstanding with USD205.41 billion, or 84.87% of the total amount. Sukuk issuances represented 34.33% of the total amount.

GCC Sukuk Issuances vs Bonds H1 2015

GCC Bonds and Sukuk Market H1 2015



Latest Issued Sukuk