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Wednesday, April 24, 2024 21:18 GMT
Qatar is likely to witness more than US$101 billion in fixed income maturities between 2021 and 2030 with the utmost debt/sukuk redemption to happen in the next five years, according to Kamco Invest.Doha is slated to see US$15.8 billion debt/sukuk maturity in 2021, US$13.4 billion in 2022, US$15.8 billion in 2023, US$16.7 billion in 2024, US$10.8 billion in 2025, US$6.1 billion in 2026, US$7.2 billion in 2027, US$4.7 billion in 2028, US$6.1 billion in 2029 and US$4.8 billion in 2030, Kamco Invest said in its latest update.During the review period, fixed income maturities in GCC are expected at US$55.1 billion in 2021, US$72.4 billion in 2022, US$64.8 billion in 2023, US$69.3 billion in 2024, US$60 billion n 2025, US$60.9 billion in 2026, US$44 billion in 2027, US$28.5 billion in 2028, US$35.9 billion in 2029 and US$33.6 billion in 2030.The GCC governments are expected to see US$157.1 billion in fixed income maturities in the next five years (2021-25) whereas corporate maturities stand at US$164.3 billion, it said, adding a majority of these maturities are denominated in the US dollar (61.3%), followed by Qatari riyals (7.6%).In terms of type of instruments, conventional bonds dominate with US$205.7 billion in maturities over the next five year whereas sukuk maturities are expected to be at US$115.7 billion, the report said, adding while bond maturities show a declining trend over the next five years, the sukuk maturities are expected to increase from 2022."The GCC bond and sukuk issuances witnessed year-on-year gains for the second consecutive year in 2020 and trends for the coming year shows flat to slight decline in issuances in 2021," it said.The report said the budget spending needs by the government is expected to drive sovereign issuances next year. However, with a "significantly" small expected deficits of around US$84.3 billion in 2021 against US$127 billion in 2020 (according to data from the International Monetary Fund), "we expect government issuances to decline year-on-year in 2021."On the other hand, corporate issuances are expected to fully or partly offset the decline in issuances by governments as better economic environment is expected to result in higher spending by the private sector.Moreover, borrowers are also keen on raising funds due to the low cost of borrowing globally. In addition, with yield on sovereign bonds reaching an all-time low, governments may be motivated to issue new debt and lock in the low cost of debt.The GCC governments have issued US$47.5 billion in bonds in year-to-date November 2020 with US$35.4 billion during the first half of 2020. Sukuks issued stood at US$28.7 billion and was almost equally split during the first half the second half of the year."The fiscal pressure from the decline in economic activity and lower oil revenues has resulted in an increase in debt issuances in the GCC in 2020," Kamco Invest said.