Middle East new bond issues to exceed $20bn 'for remainder of the year'

UAE and Kuwait to see greatest level of activity in Q4, according to Fisch Asset Management
Middle East new bond issues to exceed $20bn 'for remainder of the year'
By Jeremy Lawrence
Tue 05 Sep 2017 11:09 AM

New bond issues will remain high for the remainder of 2017, with estimates in excess of $20 billion, as a result of favourable market conditions, according to Fisch Asset Management.

The statement by Fisch, a global leader in convertible and corporate bond strategies, highlighted “an encouraging landscape for new bond issuances in the GCC [that] will likely see a USD sovereign deal between Saudi and Bahrain, while Oman is anticipated to confirm new issues, depending on the size of deficits.

“UAE and Kuwait are very well positioned to take advantage of current conditions – resulting in new issues, provided there is a pull factor from investors,” the statement continued.

Philipp Good, CEO of Fisch Asset Management commented: “The new issues season kicked off again on August 28 with roadshows and with the September 4 US holiday. Very important to this season are some pre-funding of maturities of 2018 bonds, including: Mubadala (IPIC 2018 bond), Taqa, Aldar and Sabic.”

He continued: “All those companies and more can benefit from great market conditions by pre-funding those maturities early. Further, there will be some Government-related entities that will conduct some new issues – primarily debut issues. Those are characterised by Investment Grade ratings, who can benefit from cheap funding and extend their duration in the bond market.”

According to the statement, Saudi banks will be patient since they have larger domestic deposits, while Saudi Telecom could be a well-received corporate entity tapping the market this year.

Fisch concludes that there are many contributing factors to the success of Q4 2017, including synchronised global growth and a low interest environment that is beneficial for emerging markets and political stability.

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