Qatar Gas Transport, the world's largest shipper of liquefied natural gas, raised about US$950 million (Dh3.48 billion) to buy 25 LNG tankers in the latest sign that confidence may be returning to the region's stalled debt markets. The "Tranche III debt" was raised from 17 international and regional banks, said the company, also known as Nakilat. Regional bond and syndicated loan issues are seeing renewed interest from international investors who fled local debt markets last year for safe-haven investments such as US treasuries. Qatar, Bahrain and Abu Dhabi have all issued sovereign debt recently, followed by fresh bonds from government and semi-government-owned companies including Mubadala Development, Abu Dhabi's strategic investment arm, and the property developer Aldar.
The Saudi stock exchange started electronic trading of sukuk and bonds for the first time on Saturday. "The opening of the Saudi debt market is good news for all the corporates who have lived off bank lending, because there is a limit to some of these banks," said Georges Makhoul, who heads the Middle Eastern and North African operations of Morgan Stanley. "You open a whole new sector in the financial market that did not exist before. You have a tremendous number of corporates and you don't have any trading of big government bonds to set the yield curve, so it is important to have a thriving corporate market."
However, the new trading system only saw two transactions worth about 101,000 riyals (Dh98,892) on its first trading day, according to data from Saudi Arabia's Tadawul exchange. Only 100,000 units of the Saudi Basic Industries Corporation's SABIC II bond changed hands, it said. More evidence of activity returning to local debt markets emerged on Saturday when Saudi Electricity, the Gulf's largest utility by market value, launched a roadshow for its second Islamic bond, which bankers expect to raise up to 7bn riyals.
Separately, the UAE plans to sell federal bonds to help fund infrastructure while seeking a credit rating, a finance official told Zawya Dow Jones yesterday. "The Federal Government mandated the Ministry of Finance to start issuing a bond for a few purposes," said Younis Al Khoori, the director general of the ministry. uharnischfeger@thenational.ae
