Debt issuances in the Middle East and North Africa (MENA) region have been on the rise in recent years, as governments and companies seek to raise funds for various projects and investments.
According to data from financial market data provider Refinitiv, the value of MENA Q1 debt issuances nearly tripled during Q1 2023 to $26.9 billion.
The country that issued the most bonds during the period was Saudi Arabia, responsible for 67% of the total bond proceeds, followed by the United Arab Emirates (17%), Morocco (9%), and Egypt (6%).
Read more: Will Sukuk issuances rise or fall in 2023?
The region has seen a mix of conventional and Islamic debt issuances, with a variety of instruments such as bonds, Sukuk, and Tawarruq being used. The majority of MENA debt issuances have been in the energy, real estate, and financial sectors, with many large companies and governments tapping into the global debt markets to raise capital.
Debt issuances are a way for companies to raise capital by selling bonds or other debt securities to investors.
This rise in debt issuances could be attributed to several factors, including low-interest rates, high liquidity in global markets, and increased investor confidence in the region’s economic recovery following the COVID-19 pandemic.
During the first quarter of 2023, government and agency issuers represented 55% of the total amount raised, while financial issuers accounted for 45% of the market share, the report said.
Sukuk or Islamic bonds raised a total of $6.3 billion, which marked a 57% increase year-on-year and a three-year high. Sukuk represented 23% of the total bond proceeds raised in the MENA region during Q1 2023, compared to 42% in the same period in 2022.
Financial issuers were responsible for the majority of sukuk issuances, with $4.8 billion, while government and agencies issued $1.5 billion worth, as per the analysis.
The largest MENA sukuk was IsDB Trust Services No. 2 SARL, which was issued by the financial sector and was worth $2 billion. The Egyptian government’s sukuk was the second-largest at $1.5 billion, followed by UAE’s DIB sukuk of $1 billion.
Citi was the top-ranked book-runner for MENA bonds in Q1 2023, with $3.5 billion in related proceeds, representing a 13% market share. Emirates NBD PJSC ranked first in the MENA Islamic bonds league table during the same period, with $863.6 million in proceeds from six issuances, representing a 14% market share, the study observed.
For more on banking and finance, click here.
