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Arab News
3 days ago
- Business
- Arab News
Qatar's debt market to surpass $150bn on steady issuance, Fitch says
RIYADH: Qatar's debt capital market is expected to exceed $150 billion in the medium term, supported by continued momentum in issuance across sovereign, bank, and corporate segments, according to a new analysis. In its latest report, Fitch Ratings said the Qatari DCM expanded 13 percent year on year in the first four months of 2025, pushing outstanding volume to $131.8 billion. The analysis noted that sovereign issuers accounted for the majority with 60 percent, while banks and corporates contributed 26 percent and 14 percent, respectively. The study positions Qatar's growth within broader Gulf Cooperation Council trends, where the region's overall DCM surpassed $1 trillion as of November, driven by robust oil revenues. In a February update, Fitch projected that the GCC will continue to rank among the top emerging-market issuers of dollar-denominated debt through 2025. On Qatar's DCM growth, Fitch stated: 'Sukuk, ESG (environmental, social, and governance), and Qatari riyal market penetration are on an upward trajectory. The potential development of digital government bonds, as part of the Qatar Central Bank's Central Bank Digital Currency project, can support the market's depth and sophistication.' The DCM, which involves the trading of securities like bonds and promissory notes, serves as a key mechanism for raising long-term capital for both businesses and governments. Qatar ranks as the third-largest DCM source in the GCC, holding a 13 percent regional share by the end of April. However, issuance volume dropped to $9.6 billion in the first four months of the year, a 36 percent decline from the same period in 2024. The share of sukuk in the DCM rose to 16.9 percent or $22 billion, but sukuk issuance slumped 86 percent year on year. Bond issuance fell 18 percent during the same period. 'Fitch's base case is that the government is going to refinance upcoming external market debt maturities and tap markets to cover a small budget surplus in 2025 under the assumption of a Brent oil price of $65 per barrel (excluding QIA investment income), while banks and corporates are likely to continue to diversify funding sources,' the report stated. While 67 percent of outstanding Qatari DCM remains US dollar-denominated, 28 percent is in riyals. In 2024, approximately 90 percent of the sovereign's bond issuance and all sovereign bond sukuk were riyal-denominated. The report highlighted that ESG debt is becoming a key dollar funding tool, accounting for almost 30 percent of all dollar DCM issuance in 2024. ESG DCM volume hit $4.1 billion by April, rising 204 percent year on year, with sukuk accounting for 18 percent. Qatar's debt-to-GDP ratio is expected to rise to 49 percent in 2025 before falling below 45 percent by 2027 on the back of increased gas output and associated budget surpluses. Fitch projects the US Federal Reserve will cut interest rates to 4.25 percent by the end of 2025, a trend the Qatar Central Bank is likely to follow. In a separate February report, the agency forecast Saudi Arabia's DCM would hit $500 billion by end-2025, spurred by the Kingdom's Vision 2030 diversification plan.
Zawya
15-05-2025
- Business
- Zawya
Oman's debt market to slow down in 2025-2026
Oman will continue to tap the debt capital market (DCM) at a gradual rate in 2025 and 2026, as the Gulf state intends to lower its overall debt to around 30% of the gross domestic product (GDP), Fitch Ratings said. Total DCM issuance stood at $10.3 billion last year, up by 61.4%, while the first quarter of the year recorded issuance worth $1.5 billion. The ratings agency said that the DCM in the sultanate is still one of the smallest in the GCC region and continues to face some local challenges, while it is also not shielded from the ongoing global uncertainty and overall slowdown in the primary market dollar issuance. It cited that Oman sees limited private sector offerings and mainly attracts banks rather than a wider range of investors. There is also limited trading or activity in debt denominated in the domestic currency. 'The Omani DCM is still developing… It faces issues such as limited private sector issuance, investor base concentrated with banks, shallow Omani rial market and low secondary market liquidity,' the ratings agency said. Fitch also noted that sukuk still dominates the funding mix, accounting for 63.4% of the DCM issuance, with the rest in conventional bonds (excluding treasury bills) as of last year. During the first three months of the year, Fitch rated around $7.2 billion of outstanding Omani sukuk at BB+. Corporates accounted for more than half (55.2%) of the sukuk, while the sovereign accounted for 44.8%. Last year, sukuk issuance went up by 124.9% to $2.9 billion, outpacing conventional bonds, which also increased by 45.4% to $7.4 billion. The Omani government intends to raise $1.9 billion from the local market in 2025. Financing needs for the current year are estimated at $6.3 billion, of which 53.2% will be financed through external debt, 30.5% by local borrowing and 16.3% by withdrawal from reserves, according to the Ministry of Finance. (Writing by Cleofe Maceda; editing by Seban Scaria)
Zawya
15-05-2025
- Business
- Zawya
Sukuk-led growth boosts Oman's debt capital market to $10.3bln in 2024
MUSCAT: Issuances of debt on the capital market of the Sultanate of Oman surged by 61.4 per cent to a total of $10.3 billion in 2024, underscoring the significant role of sukuk and conventional bond offerings by government and corporate entities in raising funds for growth and operational needs. International ratings agency Fitch, in a commentary on Oman's Debt Capital Market (DCM), noted that issuances across multiple currencies—including treasury bills—totaled $1.5 billion during the first quarter of 2025 alone. Islamic sukuk issuances grew by 124.9 per cent year-on-year to $2.9 billion in 2024, outpacing the growth of conventional bonds, which rose by 45.5 per cent year-on-year to $7.4 billion (across all currencies). Notably, all debt issued by government-related enterprises (GREs) last year was in the form of sukuk, Fitch observed. 'Sukuk demand remains strong, primarily from Oman's Islamic banks and windows—which held about 19.2 per cent of the banking system market share as of end-February 2025—as well as from Islamic banks in other GCC countries,' the ratings agency stated in its 'Non-Rating Action Commentary'. Looking ahead, Fitch anticipates a slowdown in the pace of debt capital market issuances by Omani entities during 2025–2026, in line with the Omani government's objective to reduce its debt to around 30 per cent of GDP. The combined size of the debt capital market declined by 2.1 per cent year-on-year to $45 billion as of end-Q1 2025, with US dollar-denominated instruments accounting for 68 per cent of the total. 'Oman is not immune to global macroeconomic and financial market uncertainty, and primary market dollar issuance has remained quiet since 2 April. However, we still expect some issuances in the pipeline, supported by continued liquidity from domestic, regional, and Islamic investors,' Fitch noted. 'We project government debt-to-GDP at 36.1 per cent by end-2026 (compared to 35.1 per cent in 2024 and 67.9 per cent in 2020). In 2024, the sovereign continued to deleverage and pre-paid portions of its debt ($2.8 billion; representing 2.5 per cent of GDP) using budget surpluses. Oman's corporates—mainly GREs—are likely to continue issuing debt to diversify their funding sources. Omani banks remain primarily deposit-funded, while wholesale debt at Fitch-rated Omani banks is limited and mainly consists of interbank borrowings,' the agency added. Oman's debt capital market, currently one of the smallest in the GCC, is expected to deepen on the back of economic diversification efforts and government-led regulatory initiatives, Fitch said. The authorities intend to progressively increase the share of domestic debt by strengthening the local debt market and refinancing a portion of upcoming external debt maturities in local currency. This strategy includes regular issuance of local instruments, revisions to the regulatory framework, and increased integration with international clearing systems to attract foreign investors. Additionally, the Central Bank of Oman (CBO) is developing new Islamic liquidity management tools—such as Sharia-compliant treasury bills—to further support the growth of this sector. 2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (
