May 09 2012
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Sovereigns dominate April 2012 conventional bond issues
09 May 2012
2Q12 started with relatively dynamic activity in the MENA conventional bonds market. USD 4.39 billion was sold across the region, up from USD 3.92 billion in April 2011, an increase of 11.89%, while the number of issues doubled.
Sovereign issuances still dominated the market with a clear domestic market type control. Some nations like Oman re-entered the market and some sectors resumed their debt activity; e.g. real estate via Kuwaiti Real Estate Company (Alargan) and power and utilities through Jordan's NEPCO ( National Electric Power Company ). In April, the average size of a MENA bond was USD 191 million while the average tenor was 3.5 years according to data compiled by Zawya Bonds Monitor.
Source: Zawya Bonds Monitor
73% of all issuances in April were shared by Central Bank of Jordan, the Egyptian Ministry of Finance and the Central Bank of Kuwait. Whether treasury bonds or bills, April 2012 similarly to the same period of last year showed that sovereign issuances is still more abundant than corporate in the region.
Oman, a shy yet significant bond market, stepped up this month through two corporate issuances: OAB's OMR 50 million and AOFS' OMR 10 million which were both reasonably oversubscribed.
Real-estate issuances were noticeable this month through Kuwaiti's Alargan. The long anticipated bond, worth KWD 26.5 million, was issued in the form of dual tranches of a fixed and variable coupon nature. The issue comes after almost two years of absence of Kuwaiti real estate.
Power and utilities, a sector that returned for the first time this year, took place via Jordan's NEPCO (National Electric Power Company). The two issues were worth of JOD 150 million each, one of the highest in the history of the government-owned firm.
Commercial Bank of Qatar recommenced its debt cycle by tapping international markets through a USD 500 million issue under its USD 5 billion EMTN program. The roadshow took place in March's final days and was emitted earlier this month. When it comes to GCC corporate bonds, this was considered April's main headline.
ENBD continued its debt routine by issuing it 80th series under its USD 7.5 billion EMTN program. The floating USD 15 million issue has a put option and was listed on the Luxembourg Stock Exchange.
According to Zawya's Bonds Monitor, four tranches out of Morocco are in their subscription stages. Crédit Immobilier et Hôtelier, a financial services entity, is preparing a mix of fixed and variable tranches with a ceiling of MAD 1 billion program.
On a nation level, Jordan remained the most active country thorough its public debt activity, hence the Jordanian dinar the most frequent currency.
Source: Zawya Bonds Monitor
With one third of Q2 concluded, the quarter seems promising unless anticipated deals become pending, waiting for more suitable market conditions vis-à-vis volatile region circumstances.
Joey Geadah is Zawya's bonds analyst and can be contacted at firstname.lastname@example.org.
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