KUALA LUMPUR: The Gulf Cooperation Council (GCC) countries, Malaysia, Indonesia and Turkiye are becoming significant emerging-market (EM) debt issuers, according to Fitch Ratings.
The credit rating agency reported that in the first five months of 2024, these countries accounted for 51 per cent of all US dollar debt issued by EMs (excluding China).
“We expect this growth to continue in 2024–2025, driven by government initiatives to develop the debt capital markets (DCM), diversify funding sources, finance fiscal deficits, government projects and maturing debts.
“Sukuk is also emerging as a key funding and policy tool, accounting for 12.4 per cent of all EM dollar debt issued so far in 2024,” it said in a statement.
Fitch highlighted that the inclusion of the GCC, Malaysia, Turkiye and Indonesia in global bond indices supports dollar bond demand from international investors.
In Malaysia, sukuk constitutes the majority of domestic DCM issuance at 60 per cent, compared to 56 per cent in Saudi Arabia and 55.3 per cent in Indonesia, and remains significant in other countries.
Fitch also noted that Malaysia’s slightly expansionary 2024 budget would drive DCM growth, with several development initiatives planned under the Madani Economy framework. – BERNAMA
