GCC Bonds and Sukuk Market Survey 2020

Executive Summary

• Continued growth: GCC Fixed Income markets set a new record for primary debt issuances in 2020, with a total of USD 132.7 billion raised, marking a growth of 16% year-on-year and setting a new milestone for Bonds & Sukuk issuances in the region. Fixed Income markets became an even more vital source of funding for GCC governments as well as corporate entities during a year that saw the outbreak of Covid-19 and the subsequent decline in oil prices put further strain on budgets and liquidity.
• 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. This year saw the issuing of 50-year bonds, constituting the longest term for a bond issued in the region.
• Positive performance: The GCC Bloomberg Barclays Aggregate Index outperformed other fixed income indices during the year, evidence of the attractiveness of the GCC Bonds and Sukuk markets. During 2020, the GCC Aggregate Index returned 8.7% for the year, whereas the Bloomberg Barclays Emerging Markets Index returned 6.5% 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 2020, 70% of the value of all primary debt issuances were of Investment Grade quality and 77% of the value of all issuances were USD denominated.