KUALA LUMPUR: Gulf Cooperation Council (GCC) countries, Malaysia, Indonesia and Turkiye are increasingly becoming major emerging-market (EM) debt issuers, according to Fitch Ratings.
In the first five months of 2024, the credit rating agency said the countries accounted for 51 per cent of all US dollar debt issued by EMs excluding China.
"We expect this growth to continue in 2024 to 2025, driven by government initiatives to develop the debt capital markets (DCM), diversify funding, finance fiscal deficits, government projects and maturing debts.
"Sukuk is also maturing as a key funding and policy tool, accounting for 12.4 per cent of all EM dollar debt issued so far in 2024 (excluding China)," it said in a statement.
According to Fitch Ratings, EM dollar debt issuance (excluding China) exceeded US$200 billion in the first five months of this year, with issuers from Saudi Arabia issuing the most debt (18.5 per cent), followed by Argentina (9.1 per cent), the UAE (9 per cent), Brazil (8.5 per cent), Turkiye (7.8 per cent), Indonesia (5.7 per cent), Mexico (5.2 per cent), and Chile (3.8 per cent).
It highlighted that the inclusion of the GCC, Malaysia, Turkiye and Indonesia in global bond indices supports dollar bond demand from international investors.
The agency revealed that sukuk makes up the majority of domestic DCM issuance in Malaysia (60 per cent), Saudi Arabia (56 per cent), and Indonesia (55.3 per cent),.
It is also significant in some other countries.
"The Malaysian government's slightly expansionary 2024 budget will drive DCM growth, with the authorities planning several development initiatives guided by the Madani Economy framework," it added.