By Consultants Review Team
Higher Islamic debt issuances by Qatar and Saudi Arabia aided the expansion of aggregate sukuk in the GCC (Gulf Cooperation Council) in 2024, according to Kamco Invest, a regional economic think tank.
Total sukuk issuances in the GCC reached a new high of $82.1 billion in 2024, up from $56.1 billion in 2023, while non-GCC global sukuk issuances totaled $50.4 billion in 2024, up from $65.1 billion in 2023, according to Kamco's most recent report.
Within the Middle East and North Africa area, the GCC was the primary driver of increased bond issuance in 2024, accounting for more than 73% of total issuance.
Total bond issuances by GCC countries hit a record high of $103.4 billion in 2024, up 71% or $42.9 billion.
The UAE saw the greatest increase in issuances this year, reaching $49.7 billion compared to $31.2 billion in 2023, followed by Qatar, which saw a surge of $13.4 billion.
The UAE was also the region's largest bond issuer, followed by Saudi Arabia and Qatar, who issued $30.8 billion and $16.8 billion respectively.
In terms of issuers, both governments and corporations in the GCC reported increasing year-on-year issuances in 2024.
Total sovereign bond issuances in the GCC was at $33.3 billion in 2024, up from $20.2 billion in 2023, while GCC corporate issuances were $70.1 billion in 2024, up from $40.3 billion in 2023, according to Kamco.
Highlighting that the outlook for 2025 remains clouded by a number of factors, the most important of which is the expected policies of the new incoming US government; it stated that the likely change in US policies is expected to be inflationary, adding to the US Fed's concerns about fighting sticky inflation.
GCC fixed income maturities are forecast to reach $89.8 billion in 2025, with refinancing of these instruments accounting for the majority of issuances by corporates and governments in the region this year, according to the report.
"We are seeing a fund raising spree in the US as treasury yields are trending upwards," according to the publication.
Saudi Arabia's recent issue of $12 billion in bonds and Kuwait's KFH's $1 billion sukuk issuance are thought to follow similar methods.
According to Kamco, issuances in 2025 will be bolstered by a robust pipeline of diversification projects across the GCC.
"We expect fresh issuances to come during the second half of 2025 as more clarity emerges in terms of interest rates and inflation," according to the report.
Fears that some of the rate cuts may be reversed in 2026 may prompt bigger issuances to lock in lower rates, it said, adding that fiscal deficits by several regional sovereigns, notably Saudi Arabia's expected $27 billion, are another reason driving GCC sovereign issuances.
"The outlook for sukuk issuances is also positive with GCC expected to dominate the market once again, in line with the last few years," according to the report.
According to Kamco, increased demand for sukuks and sustainable finance will fuel growth in global issuances of sukuks and ESG (environmental, social, and governance) sukuk instruments
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