GCC Bond and Sukuk Issuances Totalled $147.9 Billion

The GCC Bonds and Sukuk market primary issuances in 2024 witnessed total issuance value of $147.9 billion through 296 issuances, recording a 55.1% increase when compared to 2023, according to a latest report from Kuwait Financial Centre (Markaz).

The report said that as of year-end 2024, Saudi Arabia accounted for 53.7% of GCC primary issuances followed by the UAE representing 26.%. The year also witnessed an increased appetite for conventional bonds which accounted for 53.3% of total issuances. Corporate issuers continued to dominate issuances, with 53.9% of issuances coming from corporate issuers.

In Q4 of 2024 alone, primary issuances amounted to $21.2 billion, an increase of 34% from the same period in the previous year. The total number of primary issuances during 2024 was 296 issuances compared with 224 during 2023, representing a 32.1% increase.

“The average issue size during 2024 increased to $500 million up from $426 million during 2023, indicating issuers are coming to the market with larger issue sizes,” the report said.

Saudi Arabian entities were the leading issuers in the GCC during 2024, raising a total of $79.5 billion through 79 issuances, representing 53.7% of the total value of primary GCC bonds and sukuk issuances.

The UAE entities ranked second with $38.5 billion through 109 issuances, representing 26% of total issuances for the year. Qatari entities followed with $15.7 billion through 74 issuances, Bahrain with $6.9 billion through 10 issuances. Kuwait and Oman shared fifth and sixth spots through $3.9 billion and $3.4 billion by way of nine and 15 issuances respectively.

Inflation Moderates

Major economies began an interest rate cutting cycle in Q3 of 2024 as inflation numbers began to moderate. The US FED began its easing cycle with a 50-basis point cut and many GCC economies followed suit.

This trend continued in Q4 of last year, with the US FED cutting rates twice during the quarter, with all GCC countries (except Kuwait) following suit. As a result, fixed income markets saw a drop in yields and a rise in bond prices across maturities. Both developed and emerging markets experienced negative returns for the quarter, driving their year-to-date (YTD) returns down.

In terms of y-o-y % growth, Kuwaiti issuances recorded the highest growth with nearly 359% increase in issuances, followed by Qatar with an increase of 236% from 2023. Oman also experienced significant growth in issuances when compared to 2023, with an increase of 84%. Saudi Arabia follows, with an increase in issuances of 51%, followed by Bahrain and the UAE with 29% and 28% respectively.

Corporate Issuances

In line with 2023, the total value for corporate issuances (including from Government Related Entities) surpassed that of Sovereign issuances. Total corporate primary issuances increased by 45.5% in 2024 compared with 2023, reaching $79.7 billion and represented 53.9% of all issuances in 2024, compared with 57.5% in 2023.

The Government related corporate entities raised a total of $17.4 billion during 2024, an increase of 21.7% from the previous year ($14.3 billion).

The highest value of corporate issuances was from Saudi Arabia with $33.1 billion, whereas the single largest GCC corporate issuance was by Aramco, with a value of $2 billion. In fact, the top 10 corporate issues in terms of value for the year were by Saudi issuers.

Sovereign issuances represented 46.1% of all issuances during the year, up from 42.5% of all issuances during the previous year. The largest sovereign issue of the year was also issued by Saudi Arabia, with a total value of $12.6 billion, the report said.