UAE Unveils Strategy to Expand Debt Capital Market Reach

The United Arab Emirates is launching several initiatives aimed at enhancing its debt capital market, reinforcing its ambition to be a leading global economic hub.

The UAE's Ministry of Finance, in collaboration with the Central Bank of the UAE, has embarked on a joint project to develop the local market. This initiative will establish programs to facilitate the issuance and listing of local public debt instruments in both primary and secondary markets. These instruments will include bonds and Islamic treasury sukuk denominated in UAE dirhams.

As part of this effort, the Ministry and the Central Bank will collaborate to provide reference pricing points for local financing operations undertaken by financial institutions in the UAE. This move is expected to invigorate local market activity and broaden the investor base.

Currently, approximately $77 billion in sukuk are listed in Dubai, while bonds listed in the emirate total $39 billion, according to the Dubai Financial Market (DFM).

The UAE's debt capital market saw a 10% increase to $270 billion across all currencies by the end of 2023, as per Fitch Ratings. Of these issuances, 71% were in US dollars, and 20.5% were in UAE dirhams. Last year, sukuk issuances across all currencies soared by 115% to $12.7 billion, while bond issuances climbed 23.6% to $132.9 billion.

Source: Cleofe Maceda / Zawya