Market Commentary

Saudi Arabia makes Bond Sales to Fund Deficit

With oil prices continuing to remain under pressure, there remains concern of a large fiscal deficit in Saudi Arabia. IMF predicts a budget deficit of ~20% of GDP in 2015, a sharp increase from 2.3% in 2014. Apart from funding the deficit through forex reserves, government also focusses over domestic debt issuance. It issued its first sovereign bond (since 2007) worth USD4bn in July 2015.

Qatar Makes a Comeback to the Debt Market

QIB (Qatar Islamic Bank), joins a string of other Gulf Banks which have tapped the debt market in recent months to replenish their capital base and support strong lending growth. It raised USD550mn through a Tier 1 perpetual sukuk. The bond was issued in accordance with the Basel III banking norms.

Islamic Bank Finances Surge 107% in Oman

Islamic banks in Oman and window operations witnessed robust growth in the first four months of 2015 with bank finances surging to OMR1,265.8mn from merely OMR611mn in the same period last year. According to the latest monthly bulletin released by the Central Bank of Oman, customer deposits held by Islamic institutions also increased to OMR847.3mn by April-end 2015, from OMR287.7mn for the same period last year. The total assets held by Islamic banks and windows increased 68.2% y-o-y to OMR1,371mn by December 2014.

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 GCC Market Update – July 2015