Fixed income market outlook: GCC issuances to remain subdued in 2021 | ZAWYA MENA Edition
Kuwait-based Kamco Invest expects fixed income issuances in 2021 in the GCC to remain flat to marginally lower year-on-year (y-o-y) after record growth last year.
“Government issuances are expected to decline from the exceptional growth in 2020 due to significantly smaller deficit financing expected next year. On the other hand, corporate issuances are expected to remain strong led by economic revival, better business sentiments and lower rates that would partially or fully offset the overall decline,” Kamco Invest said in a report Wednesday.
GCC fixed income issuances during 2020 rose for the second consecutive year notching another record high, but the y-o-y growth was marginal compared to last year. Growth for the year was dragged by December numbers when there were no primary market bonds or sukuk from the regional governments and no sukuk issuances from the corporates.
Total issuances reached $140.3 billion during the year as compared $139.1 billion in 2019 led by higher issuances of bonds, whereas sukuk issuances remained flat.
Bond issuances reached $95.3 billion in 2020 in the region compared to $94.1 billion during 2019, up 1.2 percent y-o-y, whereas sukuk issuances stood at $45 billion.
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