Middle East

The Industrial Development Bank of Turkey, Turkiye Sinai Kalkinma Bankasi (TSKB), has launched its debut sustainable bond, the latest in a string of Turkish bank issuers that have forayed into the ESG financing market over the last year.

Diversification has taken hold in central Asia's Uzbekistan, which over the last two years has started its pivot towards international capital markets. According to sources, a plethora of debut deals is expected to hit markets in coming months.

Market participants agreed the US could have imposed far harsher sanctions on Turkey this week, which helped to fuel a slight rally in local risk assets on Tuesday morning.

The Gulf region has fared well this year, despite the double impact of the coronavirus pandemic and the drop in oil prices, according to Dr Jarmo Kotilaine, chief planning and monitoring officer at Bahrain’s Tamkeen and author of Trials of Resilience: How Covid-19 is driving economic change in the Arab Gulf. Kotilaine believes an expansion of capital markets activity in the region will be a key driver of economic growth in 2021.

With returns on developed market bonds being squeezed as never before, debt analysts are heralding emerging markets as the place for investors to be in 2021. Yet the faster the global economic recovery, the more vulnerable EM fixed income will be to what has often been its downfall: any signal of tighter global liquidity conditions, write Mariam Meskin and Oliver West.

Emerging market bond mandates are continuing into the last month of the year, despite expectations that activity would quieten down after a jam-packed year of issuance. Kuwait’s Burgan Bank and Montenegro are among some of the CEEMEA issuers seeking to take advantage of unfalteringly attractive credit conditions.

Despite the market volatility and uncertainty that have gripped emerging market bond markets in 2020, green and ESG-linked issuance has continued to grow, and market participants expect further expansion next year.

Fifty year bonds caught the attention of issuers and investors alike across CEEMEA, especially the Middle East, this year. That will continue in 2021, but investors are not ready to flash their cash indiscriminately.

Emerging market borrowers seem to be enjoying unfettered access to the capital markets, but many are now questioning whether this Covid-induced debt spree can be sustained in the long run. With fiscal support packages likely to be needed in 2021, investors will be sifting through EM governments to see which will be able to borrow and which will be left behind, writes Mariam Meskin.

Rating: B2/—/B+

Rating: B2/—/BB-

Turkey's largest city, the Istanbul Metropolitan Municipality, hit markets on Wednesday, seeking to raise dollars in a rare debt-raise. The deal is one of three major bonds from Turkish issuers in the last week.