GCC bonds and sukuk totaled USD118.6 bln in 2015 — Markaz

Kuwait Financial Centre "Markaz"
Kuwait Financial Centre “Markaz”

KUWAIT, May 22 (KUNA) — The aggregate primary issuance of bonds and sukuk by GCC entities, including Central Banks, totaled USD118.653 billion in 2015, a 37.20 percent increase from the total amount raised in 2014, said Kuwait Financial Centre “Markaz”. A large part of the increase is attributable to the Saudi Arabian sovereign issuances, first of such issuances since 2007, Markaz added in a report on Sunday.
It has highlighted the trends pertaining to bonds and sukuk issuances in the GCC region during 2015.
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, it showed. During 2015, a total of USD53.498 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 USD23.347 billion, representing 43.64 percent of the total amount raised by CBLIs through 65 issuances, followed by the Central Bank of Qatar, which raised a total of USD15.119 billion, a reduction of 21.43 percent from USD19.243 billion raised in 2014, it said. 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, the report added. A total of USD65.155 billion was raised in the GCC bonds market in 2015, a growth of 82.40 percent from USD35.720 billion raised in 2014, it stated. A total of USD44.377 billion was raised in H2 2015, 113.58 percent higher than USD20.778 billion raised in H1 2015, driven by new Saudi sovereign issuances which amounted to USD30.647 billion.
Saudi Arabia was the leading issuer in 2015, raising USD35.008 billion through 15 issues and representing 53.73 percent 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 USD18.519 billion during 2015, representing 28.42 percent of the total value, it said, adding that Bahraini entities represented 7.15 percent of the total issuances, raising USD4.656 billion through 7 issues. Qatari entities raised USD2.041 billion while Omani entities raised USD3.766 billion. National Bank of Kuwait was the only issuer from Kuwait. The total value raised by corporate entities decreased by 17.51 percent from USD32.970 billion in 2014 to USD27.196 billion in 2015. During 2015, sovereign issuances dominated the majority of the amount raised in the GCC bonds market, with USD37.959 billion or 58.3 percent of the total amount raised through 16 issues, it noted. Saudi Arabia raised SAR115 billion (USD30.647 billion). Kingdom of Bahrain issued a 10 year USD1.10 billion bonds priced at 7.00 percent and a 5 year USD1.150 billion bearing a coupon of 5.875 percent, it made clear. Conventional issuances raised USD55.593 billion, or 85.32 percent of the total amount raised in GCC bonds and sukuk market during 2015. This was an increase of 109.79% as compared to 2014. Sukuk issuances witnessed a modest growth of 3.71% from USD9.22 billion in 2014 to USD9.562 billion in 2015, the report said. Government sector accounted for the largest amount raised during the year, with USD37.959 billion representing 58.26 percent of the total amount raised, through 16 issuances. The Financial sector followed with USD22.874 billion (35.11 percent) raised through 179 issues. According to the report, issuances with tenures of five to ten years raised the highest amount, USD55.55 billion, through 69 issuances, representing 85.3 percent of the total amount raised. Nine perpetual bonds raised a total of USD3.701 billion (5.7 percent of the total value). GCC bonds and sukuk issuances during 2015 had issue sizes ranging from USD4.0 million to USD5.33 billion. Issuances with principle amounts greater than or equal to USD1.0 billion raised the largest amount of USD40.189 billion, representing 61.68 percent of the total value, it mentioned. The GCC Bonds and Sukuk market in 2015 was dominated by SAR denominated issuances: a total of SAR129.4 billion (USD34.485 billion) was raised, representing 52.9 percent of the total amount. U.S. Dollar denominated issuances raised USD20.706 billion (31.8 percent of the total amount raised) through 111 issuances. During 2015, a total of 72 issuances, 35.12 percent of the total Sovereign and Corporate issuances, were rated by either one or more of the following rating agencies: Moody’s, Standard & Poor’s, Fitch, and Capital Intelligence. During 2015, some 86 bonds and sukuk, representing total of USD26.49 billion, were listed on exchanges. The number of regional bonds and sukuk listed on international exchanges were 74 issues with a total value of USD19.37 billion versus 12 issuances listed on regional exchanges with a total value of USD7.11 billion, it said. As of 31 December 2015, the total amount outstanding of corporate and sovereign bonds issued by GCC entities was USD274.988 billion. Corporate issuances make up the majority of the total amount outstanding with USD201.90 billion, or 73.42 percent of the total amount. Sukuk issuances made up 30.69 percent of the total amount with USD84.391 billion. Of the amount outstanding as of 31 December 2015, USD115.078 billion, or 41.85 percent were issued by UAE entities. Bonds and Sukuk by Kuwaiti entities represented USD6.338 billion, or 2.31 percent of the total amount outstanding. Markaz, with total assets under management of over KD 1 billion as of December 31, 2015 (USD 3.38 billion), was established in 1974 and has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. It was listed on the Kuwait Stock Exchange (KSE) in 1997. (end) fh.tb.hm

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