Gulf bonds, sukuks worth $95.3 billion issued in 2023

The annual report titled ‘Gulf Bond and Sukuk Markets in 2023’ has been released by the Kuwait Financial Center “Markaz.”

According to the report, the total initial issuances of Gulf bonds and sukuks in 2023 reached $95.3 billion, marking a notable 20.3% increase compared to the previous year’s total of $79.2 billion. The number of primary Gulf issues of bonds and sukuks also rose to 224, surpassing the 201 issues recorded in the previous year, reports Al-Qabas daily.

Geographically, Saudi Arabia led in the total value of initial issuances during 2023, accounting for $52.5 billion or 55.1% of the total. The UAE followed with $30.0 billion, constituting 31.5%. Other contributions include Bahrain with $5.3 billion (5.6%), Qatar with $4.7 billion (4.9%), Oman with $1.9 billion (1.9%), and Kuwait with $0.8 billion from 5 issues.

Sovereign issuances represented 42.5% of the total initial issuances, amounting to $40.5 billion, reflecting a 5.8% decrease compared to 2022.

Meanwhile, issuances by Gulf companies, including those wholly owned by Gulf governments, reached $54.8 billion, marking a significant 51.4% annual increase.

In terms of structure, initial issuances of Gulf Sukuk outperformed traditional bond issuances, constituting 53.9% of the total with a value of $51.3 billion, a 13.4% increase from the previous year. Conventional bond issuances amounted to $44.0 billion, representing 46.1% of the total Gulf primary issuances of bonds and sukuks, marking a 29.6% increase.

The government sector led in the GCC region’s total primary issuances of bonds and sukuks, reaching $40.5 billion, representing 42.5% of the total issuances. The financial sector came in second place with $36.7 billion, constituting 38.5% of the total initial issuances.

In terms of maturity periods, issuances with a maturity ranging from five to ten years dominated, totaling $45.4 billion or 47.6% of the total value. Issues with a maturity period of less than five years represented 31.2%, amounting to $29.7 billion.

The volume of initial issuances ranged from one million US dollars to 4.0 billion dollars, with issuances valued at one billion US dollars and above accounting for $58.8 billion or 61.7% of the total.
Dollar-denominated issuances led, totaling $67.2 billion, representing 70.5% of the total value.

Saudi riyals came next with a value equivalent to $17.0 billion, constituting 17.8% of the total value.
Regarding credit ratings, 69.1% of Gulf primary bond and sukuk issues in 2023 received one or more credit ratings from agencies such as Moody’s, Standard & Poor’s, Fitch, and Capital Intelligence. Of these, 59.1% were rated as investment grade.

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