The UAE’s debt capital markets have shown notable growth, with a 13.1% increase in outstanding debt, reaching $294.4 billion by the end of the third quarter of 2024.
Bashar Al Natoor, Managing Director & Global Head of Islamic Finance at Fitch Ratings, stated that the UAE’s debt capital markets (DCMs) have demonstrated robust growth.
“This growth underscores the country’s expanding financial landscape and its strategic positioning in the sukuk market. Sukuk had a share of 20% of the total DCM in the UAE, with the rest in bonds at end-3Q24,” he told WAM.
Al Natoor also noted that the UAE holds a significant 6.6% share of the global sukuk market, ranking fourth after Malaysia, Saudi Arabia, and Indonesia. Sukuk now constitutes 20% of the UAE’s total debt capital market, with bonds making up the remainder.
Additionally, the UAE is a major US dollar debt issuer in emerging markets, with an 8.9% share, trailing only Saudi Arabia and Brazil. The country also ranks as the second-largest issuer of ESG bonds and sukuk in emerging markets, outside China, during the first nine months of 2024.
Regionally, the UAE holds the second-largest share of GCC outstanding sukuk at 16.2%, following Saudi Arabia’s 71%. Although sukuk issuance in the UAE fell by 13% year-on-year to US$9.9 billion in the first nine months of 2024, this decline is less pronounced than the 25% decrease in bond issuance.
The UAE’s debt capital market is expected to surpass $300 billion by the end of 2024, driven by its strategic enhancement focus, attracting both regional and international investors. Al Natoor concluded by noting the balanced growth in sukuk and bond issuances, high investment-grade ratings, and the UAE’s strategic market positioning, both globally and regionally.
