UAE debt capital market (DCM) maturity is rising and will hit $300bn by 2030, according to Fitch Ratings.
The DCM crossed $250bn by end of H1 this year and is growing apace, said the financial analysis company.
This follows issuers funding diversification goals and government initiatives to develop the DCM, implement the Dirham Monetary Framework, and build the domestic yield curve.
UAE debt capital market
Bashar Al Natoor, Global Head of Islamic Finance at Fitch, said: “The DCM in UAE is increasingly maturing – not only in terms of size, but also through diversity of issuances and currencies.
“However, the local DCM still faces key challenges, such as the UAE’s corporate funding culture being geared towards bank financing.
“With COP28 to be held in the UAE, sustainability and ESG debt are in the spotlight.”
In H1 of this year, sukuk issuance in all currencies was up 52.9 per cent year-on-year ($6.7bn).
Bonds were up 5.7 per cent ($60bn). Sukuk issuance recovered to 35.1 per cent of US dollar DCM issuance by June 30; the rest were in bonds.
Sukuk issuers have adapted central bank requirements to comply with AAOIFI sharia standards, introduced in 2021.
The federal government has shifted from issuing Dirham T-bonds to issuing T-sukuk for May–December 2023.
The United Arab Emirates had the largest DCM in the GCC – a 36.2 per cent share.
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