UAE Is Third-Largest US Dollar Debt Issuer Among Emerging Markets In H1 2024


(MENAFN- Khaleej Times) The UAE was the third-largest US dollar debt issuer among emerging markets, excluding China, with a share of 8.9 per cent of the total in the first half of 2024.

Only Saudi Arabia with a 17.4 per cent share and Brazil with 9.4 per cent were ahead of the UAE, Fitch Ratings said.


The UAE's debt capital market outstanding is expected to cross $300 billion in the second half of 2024, the rating agency said on Thursday.

"The debt capital market structural reforms, the implementation of the Dirham Monetary Framework and generally resilient investor appetite have led to notable growth over the past five years," said Bashar Al Natoor, global head of Islamic finance at Fitch Ratings.


“However, there are still gaps to address. The dirham market remains nascent, the investor base is highly concentrated in banks and most corporates still prefer bank financing over bonds or sukuk. Some issuers opt for bonds instead of sukuk due to the complexity of compliance with the Shariah standards of the Accounting and Auditing Organisation for Islamic Financial Institutions," he added.

From January to June this year, debt capital market outstanding rose 11.8 per cent year-on-year to $281 billion. In the first half, sukuk issuance in all currencies jumped by 9.8 per cent, outpacing bond issuance, which fell by 44.3 per cent.

Fitch rates $26.5 billion of UAE sukuk, 94.3 per cent of which are investment-grade.

Following the COP28 in the UAE in 2023, environmental, social and governance (ESG) debt issuance in the first half slowed by 35 per cent to $3.3 billion, with the majority - 67.5 per cent - being in the sukuk format. In April 2024, the regulator extended the fee exemption for listing ESG bonds and sukuk.

“We forecast the UAE Government's consolidated debt at 24 per cent of GDP at end-2024. Individual emirates have varied debt profiles, with Sharjah standing out with a higher debt burden. Dubai repaid Dh29 billion in market and private debt in 2023. Fitch expects budget surpluses in Abu Dhabi and Dubai and deficits in Ras Al Khaimah (RAK) and Sharjah.”

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Khaleej Times

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