Mubasher: Consolidated primary securities issuances of entities such as central banks' local issuances, sovereign and corporate issuances in the Gulf region has decreased by 11.7% in 2018 from the prior year, according to a new report by the Kuwait Financial Centre (Markaz), titled ‘GCC Bonds & Sukuk Market Survey.’
Bond and sukuk issuances by GCC entities dropped to $153.74 billion last year, with Saudi entities being the top issuers in terms of value.
GCC central banks' local issuances drop 11.5%
Central banks local issuances (CBLI) in the GCC shrank by 11.5% to total of $61.87 billion in 2018, Markaz said.
The issuances were offered by the central banks of Kuwait, Bahrain, Qatar, and Oman. The Central Bank of Kuwait (CBK) raised the highest amount of $30.43 billion (KWD 9.14 billion) or 49.18% of the total amount raised by CBLIs through 42 issuances, followed by the Central Bank of Bahrain (CBB) which raised a total of $15.42 billion (BHD 5.79 billion).
GCC sovereign, corporate securities fall 12%
Sovereign and corporate securities, including bonds and sukuk, in the Gulf region reached a total of $91.87 billion during 2018, a year-on-year decrease of 11.89% when compared to $104.26 billion in 2017.
The second quarter of 2018 witnessed the highest value of GCC issuances with a total of $36.08 billion through 90 issuances, while the fourth quarter was the least active with $13.13 billion raised through 61 issuances, the report noted.
Markaz's report included geographical allocation, as “Saudi Arabia-based issuers led the GCC in 2018, raising a total of $28.51 billion through 22 issuances and representing 31% of the total value raised in the GCC, followed by the UAE with 30% and Qatar with 24%.”
It added that Kuwaiti issuances represented 1.4% of the total at $1.3 billion through eight issuances compared to $10.83 in 2017. Meanwhile, Oman's total issuances amounted to $10.8 billion through 10 issuances representing 12% of all GCC issuances.
Qatari issuances surged 259.22% to a total of $22.23 billion last year, while Bahraini issuances represented 2.2% of the GCC region's issuances with $2.02 billion through four issuances.
With a consolidated value of $81.71 billion, 88.9% of the total issuances representing 189 bonds and sukuk in the Gulf region were listed on exchanges, Markaz said in its report, adding that “listing on international exchanges accounted for 91.1% with Dublin accounting for the listing of 61 of such issuances.”
Corporate, sovereign securities’ value outstanding in GCC
The total amount outstanding of both corporate and sovereign bonds and sukuk issued by entities in the Gulf stood at $484.02 billion as at 31 December 2018.
GCC government issuances made up 50.3% of the total amount, with the financial sector leading corporates with an outstanding amount of $109.86 billion, or 22.7%.
Saudi Arabian entities have raised $188.44 billion, or 38.93% of the amount outstanding by the end of 2018, whereas securities by Kuwaiti entities logged $20.75 billion, accounting for 4.28% of the total amount outstanding.