The GCC conventional bond market recorded a poor performance in the first quarter of 2010 amid Dubai-linked and broader sovereign debt fears, NCB Capital, the largest investment bank in Saudi Arabia and a subsidiary of National Commercial Bank, reported.

Primary issuance fell by some 70 percent in value from the average of the previous three quarters to $3.4 billion and the GCC Sukuk market stalled even more sharply in marked contrast to global trends.

Sentiment was shaken by high-profile events such the disputes associated with the 100 million TID Global Sukuk issued by Kuwait’s Investment Dar and the Dubai World debt moratorium.

Both cases heightened market uncertainty and raised broader concern about Sukuk structures and the lack of widely accepted mechanisms for dealing with default-type situations.


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