Project to facilitate issuance and listing of local public debt instruments in primary and secondary markets
Bhaskar Raj
DUBAI: The UAE’s Ministry of Finance has launched a joint project with the Central Bank of the UAE to develop a debt capital market by setting up programmes to facilitate the issuance or listing of local public debt instruments in the primary and secondary markets.
As part of the project, the two agencies are working to provide reference pricing points for local financing operations carried out by financial institutions in the UAE to boost local market activity and expand the investor base.
The debt instruments will include bonds and Islamic treasury sukuk in UAE dirhams.
The UAE Ministry of Finance has announced the implementation of transformational projects in line with the ‘We the UAE 2031’ vision and the UAE’s efforts to become the global hub for the new economy over the next ten years.
A ministry statement said: “The first project, ‘Developing the Local Debt Capital Market in the UAE’, is to establish programmes for issuing local public debt instruments, represented by bonds and Islamic treasury sukuk in UAE dirhams, and trading them in the primary and secondary local markets, aiming to build and enhance the yield curve in UAE dirhams. The project is to provide reference pricing points for local financing operations carried out by financial institutions, thereby enhancing market activity, expanding the investor base, and developing a highly efficient financial market in the UAE.”
Fitch Ratings said in a recent report that the size of the UAE debt capital market rose by 10% year on year to $270 billion outstanding at end-2023 and is forecast to cross $300 billion in 2024-2025. Among the Gulf Cooperation Council (GCC) countries, the UAE has the largest US-dollar debt capital market. The report said Nasdaq Dubai, the UAE’s international financial exchange, will likely continue being one of the top listing centres for US dollar sukuk globally.
The ministry is also working on implementing another project, ‘Enhancing the Presence of Specialised Emirati Leadership in the Financial Field at International Forums’, which is the main supporter in making the UAE the most prominent in international cooperation over the next ten years.
“This is a joint project with the Ministry of Foreign Affairs, aimed at investing in empowering national talents to occupy Emirati memberships in leadership positions within international organisations, their committees, or federations linked to the country’s agenda,” said the statement.
This will enhance the UAE’s presence in international forums and support its participation in shaping international strategic decisions and building economic partnerships with countries worldwide, through the leadership and membership of national talents from the Ministry of Finance in various international organisations, forums, and boards of directors, the statement added.
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