GCC Bond and Sukuk Markets Rebound in October as Global Yields Fall

Kamco Invest data show regional indices rising for the month while staying down for the year, and Gulf issuance falling a third from September as sukuk sales dropped sharply.

By Nakoda News Desk

2 days ago·2 min read

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Gulf bond and sukuk indices rose in October as US Treasury yields fell, according to Kamco Invest.Photo: Arab News

Gulf and wider Middle East bond markets rose in October as government bond yields fell in major economies, according to an analysis by Kamco Invest reported by Arab News.

The MENA Bonds Index gained 1.73 percent in the month and the MENA Sukuk Index rose 0.96 percent, taking the combined MENA Bonds and Sukuk Index up 1.5 percent. The GCC Credit + HY Index gained 1.24 percent, broadly in line with the 1.26 percent rise in the Emerging Markets USD Agg Index.

"The improvement in global bond markets supported a broad rebound across GCC and MENA fixed income benchmarks," Kamco Invest said.

The rally followed a drop in US Treasury yields. The 10-year yield fell 35.7 basis points to 4.93 percent in October and the 30-year yield fell 32.1 basis points to 5.31 percent.

The rebound recovered only part of earlier losses. MENA Bonds were still down 2.58 percent for the year to date and GCC Credit + HY was down 2.19 percent, according to Kamco Invest.

Issuance Slows After a Busy September

Total GCC bond and sukuk issuance with maturities of more than one year was about $11.3 billion in October, down about 33.5 percent from $17 billion in September but above the $7.3 billion raised in August. Conventional bonds made up about $10.3 billion, more than 90 percent of the total.

Government bond issuance was about $3.7 billion and corporate bonds about $6.5 billion. Sukuk sales fell sharply after an unusually active September. Government sukuk issuance dropped to about $500 million from $3.4 billion, and corporate sukuk issuance fell to about $500 million from $4.7 billion.

In September, Moody's said it expected sukuk issuance to recover gradually in the second half of 2026, to between $140 billion and $150 billion, as Gulf issuers returned to the market, even though regional conflicts had weighed on activity in several key markets.

Market Size

Citing Fitch data, Kamco Invest said the GCC debt capital market passed $1.2 trillion at the end of the third quarter of 2026. Saudi Arabia accounted for 48 percent of outstanding debt, the UAE for 27 percent and Qatar for 12 percent.

For Gulf borrowers, including the state-linked companies funding energy, infrastructure and AI data centre projects, the direction of US yields still drives much of the cost of raising money. A lasting fall would help issuers return to the market. The year-to-date losses show how much regional debt has been hurt this year by higher global rates and by the conflict around the Gulf.