KUALA LUMPUR (June 26): The Gulf Cooperation Council (GCC) countries, Malaysia, Indonesia and Türkiye 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% 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, and finance fiscal deficits, government projects and maturing debts.

“Sukuk is also emerging as a key funding and policy tool, accounting for 12.4% of all EM dollar debt issued so far in 2024,” it said in a statement.

Fitch highlighted that the inclusion of the GCC, Malaysia, Türkiye 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%, compared to 56% in Saudi Arabia and 55.3% 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.

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