The Gulf Cooperation Council (GCC) region enjoyed a sharp rise in sukuk issuance in the first quarter of 2019. Issuance rose by $32 billion, bringing outstanding debt to $478 million.
According to research from the National Bank of Kuwait, the bulk of issuance came from the governments of Saudi Arabia and Qatar, driven by favourable credit ratings, low borrowing costs and a strong appetite among international investors for both regional bonds and Islamic instruments.
The report also shows that yields in the GCC have lowered, thanks to rising oil prices, which have in turn helped support fiscal consolidation efforts across the region.
The fall in yields was led by Bahrain and Oman, sparked by a $10 billion support package to Bahrain from neighbouring countries and the prospect of fiscal reforms in Oman following the introduction of VAT.
The report states that both global and regional yields are expected to remain low in line with an expected global economic slowdown, low inflation and a recovery in oil prices.
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