GCC bond and sukuk issuance surged by USD 32 billion in Q1
Saturday, 05 25 2019, Category: Economy, Country: Gulf Cooperation Council
GCC bond and sukuk issuance surged by USD 32 billion in Q1 2019, lifting outstanding debt in the region to USD 478 billion. Meanwhile, yields in the GCC trended lower, supported by rising oil prices which have benefitted fiscal consolidation efforts across the region – according to research published by the National Bank of Kuwait (NBK).
A sharp rise in regional debt issuance, led by the sovereigns of Saudi Arabia and Qatar, was driven by low borrowing costs, good credit ratings, and a strong appetite for regional bonds among international investors. Regional yields are expected to remain low, while issuance is forecast to increase on 2018’s levels.
Global and regional yields continue to trend down in Q1 2019, driven by expected global economic slowdown, dovish signals on monetary policy, low inflation, and a sharp recovery in oil prices from December 2018 lows. Falls were led by Bahrain and Oman, despite continued pressure on fiscal positions. A fall in Bahrain sovereign yields was sparked by the provision of a USD 10 billion support package by neighboring countries last year of which it recently received , in tandem with a series of fiscal reforms. Oman yields also fell sharply, supported by the promise of fiscal reforms including the introduction of VAT.