Muscat – The GCC countries recorded a landmark year for fixed income issuances in 2024, with total bond issuance in the region rising to a record high of $103.4bn. This marks a 71% jump from $60.5bn worth of bond issuances in 2023, according to the GCC Fixed Income Market 2024 report published by Kuwait-based Kamco Investment.
Corporate issuances led the way, with companies in the GCC raising a total of $70.1bn, reflecting a remarkable growth of 74% compared to 2023. Meanwhile, government bond issuances in the region also saw a strong year-on-year increase, totalling $33.3bn, a 65% rise from the previous year.
At the country level, the UAE saw the most significant increase in issuances, with bonds totalling $49.7bn in 2024, compared to $31.2bn in 2023. Qatar followed closely, posting a rise of $13.4bn. The UAE also emerged as the region’s largest bond issuer, followed by Saudi Arabia with $30.8bn, and Qatar with $16.8bn.
Bond issuances in the broader Middle East and North Africa (MENA) region also experienced a significant jump in 2024. Issuances reached a three-year high of $141.1bn, up 39.4% from $101.2bn in 2023. The sharp rise was driven by an impressive uptick in corporate bond issuances.
Governments in the MENA region raised $68.9bn from bonds in 2024, up from $60.5bn the previous year. Corporate issuances, however, surpassed government issuances for the first time in at least six years, reaching $72.2bn, a surge of 77.4% from $40.7bn in 2023.
GCC nations were the dominant drivers of this growth, accounting for over 73% of total bond issuances in the MENA region. In contrast, bond issuances from non-GCC MENA countries – including Egypt, Morocco, Jordan, Tunisia, and Lebanon – continued to decline for a third consecutive year, falling to $37.7bn in 2024 from $40.7bn in 2023.
Looking ahead to 2025, Kamco Investment maintains an optimistic outlook for bond issuances in the GCC. The report cites expectations of moderate oil prices and a strong pipeline of infrastructure projects across the region, which are expected to drive continued government bond issuance.
‘Deficit financing and the refinancing of maturing debt will make up the majority of bond issuances in 2025,’ the report noted. ‘Corporate issuances, meanwhile, will remain sensitive to interest rate movements and will largely depend on the trajectory of global rates in the second half of the year.’
Kamco’s report suggests that GCC central banks are likely to align their monetary policies with the US Federal Reserve’s moves, given the peg of most regional currencies to the dollar. However, Kuwait’s currency, which is pegged to a basket of currencies, may see different monetary policy adjustments compared to its peers.
An elevated maturity profile in 2025, with $89.8bn in bonds due for refinancing, is expected to dominate both corporate and government issuances in the region. Kamco anticipates that the GCC bond market will be further buoyed by a ‘fund-raising spree’ in the US, as Treasury yields rise. This trend could add further support to bond issuances across the GCC, especially given the ongoing diversification and development projects aligned with the region’s long-term goals.
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