Primary issuances of Bonds and Sukuk in GCC declines 45% year-on-year
KUWAIT CITY, March 8: Kuwait Financial Centre “Markaz” released its research report titled “GCC Bonds and Sukuk Market Survey for the year 2022”. The report revealed that primary issuances of Bonds and Sukuk amounted to USD 78.7 billion in2022, marking a decline of 45% year-on-year from USD 143.2billion raised in 2021.The total number of primary issuances totaled 201, compared to 281issuances in the previous year.
Geographical Allocation: Saudi-based issuers led the GCC Bonds and Sukuk market during 2022, raising a total of USD 46.4 billion, representing 59% of the total value raised in the GCC, through 41 primary issuances. The UAE followed with 27% and Qatar with 7% of the total value raised, while Kuwaiti entities raised a total of USD 1.3 billion, representing 2% of the total value raised in2022.
Sovereign vs. Corporate: Sovereign issuances by GCC entities amounted to USD 41.9 billion in2022, down36% year-on-year from USD 65.2billion raised in2021. Corporate issuances, on the other hand, amounted to a total value of USD 36.8 billion in2022, down53% year-on-year from USD 78billion raised in2021.
Conventional vs.Sukuk: Conventional issuance s decreased in 2022 by 61% year-on-year, where a total of USD 33.6billion was raised, representing 43% of the total value of primary issuances in the GCC. Moreover, Sukuk issuances decreased by 19% year-on-year to reach USD 45.2billion in2022, compared with USD 56.1 billion raised in 2021, representing 57% of the total value of issuances.
Sector Allocation: The Government sector accounted for the largest amount of primary debt issuances by value, raising a total of USD 41.9billion, or 53% of the total value of issuances in the GCC in 2022. The Financial sector was second in its contribution to the total value of primary issuances in the region, raising a total value of USD 31.5billion and representing 40% of the total market.
Maturity Profile: Issuances with tenors of 5-10 years dominated the GCC debt capital markets by total value, raising a total of USD 28.7 billion, or 37% of the total value of issuances. Issuances with tenors of less than 5 years came in second with a total value raised of USD 26.8 billion,or 34% of the total value of issuances.
Issue Size Profile: The size of GCC Bonds and Sukuk issuances ranged from USD 7 million to USD 8.1billion. Issuances with principalamounts greater than or equal to USD 1 billion raised the largest amount totaling USD 48.8 billion, representing 62% of the total primary issuances.
Currency Profile: Saudi Riyal-denominated issuances led the GCC Bonds and Sukuk market in 2022, raising a total of USD 33.1 billion,or 42% of the total value of issuances, through 18 issuances. The second largest issue currency was the US Dollar, where issuances in USD raised a total of USD 32.6 billion, or41% of the total value of issuances in the GCC, through 97issuances.
ESG Bonds andSukuk Profile: Issuance s of green and sustainable Bonds and Sukuk amounted to USD 7.0 billion, or 9% of the total value of issuances in the GCC in 2022. Saudi Arabia made up 55% of the issuances with a total value of USD 3.8 billion, through 5 issuances. The UAE issued the remaining USD 3.2 billion representing 45% of the issuances, through 7 issuances.