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GCC Bonds and Sukuk Market Survey - H1 2021

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Executive Summary

  • Sustained Growth: GCC Fixed Income markets continue to see significant issuing activity on the back of a global pandemic, where GCC states raised a total of USD 83.7 billion during the first half of 2021 alone ‚Äì marking a growth of 18% year-on-year and setting another new milestone for Bonds & Sukuk issuances in the region. Fixed Income markets have become a vital source of funding for GCC governments as well as corporates as the implications behind Covid-19 continue to result in stricter operating environments.
  • Diversified Market: GCC Bonds and Sukuk issuances cover a fair spectrum of sectors, growing number of corporate and sovereign issuers and maturities, providing an opportunity to construct well-diversified portfolios to mitigate risks. H1-2021 has seen another 40-year bond issuance, constituting the second longest term out of the outstanding bonds in the region
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  • Outperforming Peers: Although the GCC Bloomberg Barclays Aggregate Index has remained flat for the first half of 2021, the index outperformed other fixed income indices during the year, evidence of the attractiveness of the GCC Bonds and Sukuk markets. During H1-2021, the GCC Aggregate Index was flat, whereas the Bloomberg Barclays Emerging Markets Index and US Aggregate Index returned -0.6% and -1.6%, respectively, for the same period.
  • Attractive Yields and Ratings: The GCC continues to maintain positive-yielding debt that is supported by high credit ratings and the majority of which are issued in USD. During H1-2021, 47% of the value of all primary debt issuances were of Investment Grade quality and 66% of the value of all issuances were USD-denominated.

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