The aggregate primary issuance of bonds and sukuk in the Gulf Cooperation Council (GCC) member states totaled USD 56.71 billion in H1 2014, a 24.71 percent increase from the total amount raised in H1 2013, a specialized economic report showed Sunday.
The report, by Al-Markaz Financial Center, stated that June was the most active month in terms of both the amount raised and the number of issuances. A total of USD 15.55 billion was raised during the month through 44 issues.
Central Bank Local Issuances (CBLI) are debt securities issued by GCC central banks in local currencies and maturities of less than one year, to regulate the levels of domestic liquidity.
The figures unveiled that a total of USD 32.14 billion was raised by the central banks of Kuwait, Bahrain, Qatar, and Oman during H1 2014.
The report stated that during H1 2014, the Central Bank of Qatar (CBQ) surpassed the Central Bank of Kuwait (CBK) as the top issuer, in contrast to the previous years, by issuing the largest amount amongst GCC central banks.
"CBQ raised USD 14.29 billion through 25 issues, representing 44.48 percent of the total CBLI amount. The CBK raised USD 13.29 billion through 37 issues, an increase of 7.87 percent from USD 12.32 billion raised through 34 issuances in H1 2013," read the report.
The GCC bonds market is composed of sovereign and corporate bonds and sukuk issuances denominated in local and foreign currencies.
"A total of USD 24.57 billion was raised by Sovereign and Corporate bond and sukuk issuances in H1 2014, an increase of 2.09 percent from the total value raised in H1 2013," the report disclosed.
I added that issuances by UAE entities raised the largest amount in H1 2014, representing 59.88 percent of the total amount, or USD 14.71 billion, and were the most active in terms of issuance frequency with 54 issuances.
"Saudi Arabian entities raised the second highest amount, USD 7.35 billion, while Qatari entities raised USD 1.18 billion. Kuwait Projects Company (KIPCO) was the sole corporate issuer from Kuwait, raising USD 500 million through a conventional bond," added the report.
With regard to the type of issuance, the report noted that corporate issuances dominated the majority of the amount raised, with USD23.82 billion or 96.95 percent of the total amount raised.
"Sovereign issuances raised USD 750 million represented by a single issuance from Government of Dubai. UAE corporate entities were the leading corporate issuers in GCC during H1 2014 in terms of value, raising USD 13.96 billion through 53 issues followed by Saudi Arabian corporate entities, which raised USD 7.35 billion through nine new issues." Conventional issuances raised USD 18.02 billion, or 73.34 percent of the total amount raised in GCC bonds and sukuk market during H1 2014, said the report, adding that "this was a substantial increase of 44.31 percent as compared to H1 2013. Sukuk issuance totaled USD 6.55 billion in H1 2014." Al-Markaz unveiled that as of June 30, 2014, the total amount outstanding of corporate and sovereign bonds issued by GCC entities was USD 245.47 billion.
"Corporate issuances make up the majority of the total amount outstanding with USD195.46 billion, or 79.6 percent of the total amount. Sukuk represented 34.6 percent of the total amount outstanding.
"Of the amount outstanding as of 30 June 2014, USD115.80 billion, or 47.2 percent, were issued by UAE entities. Bonds and sukuk by Kuwaiti entities represented USD4.65 billion, or 1.9 percent of the total amount outstanding," it concluded.