Since the beginning of the year: 26% decrease in the volume of bond issues

There has been a 26% decrease in the volume of bond issues since the beginning of the year, according to an analysis conducted by the credit rating company Maalot S&P. The analysis shows that half of the issues were concentrated in 10 companies
A total of NIS 42 billion has been raised in the bond market since the beginning of the year, a decrease of 26% compared to the volumes in the second half of 2021 and a jump of 75% compared to the volume of raising in the first half of 2021.
The first half of 2022 and the second half of 2021, especially compared to previous periods, came mainly to support the high growth in banks' credit portfolios after it slowed in 2020 when the corona crisis erupted.
In the IPO activity of the real estate sector, real estate companies continued to lead and the volume of IPOs in the real estate sector amounted to NIS 15 billion. This amount constitutes approximately 65% ​​of the volume of issues in the real estate sector.
A key source in the bond market said the decline in the volume of bond issues in the first half of the year was due to rising yields and rising inflation which caused companies that did not urgently need the money not to raise. "The competition with the banks is also great," he adds, saying that during this period when investors are more selective, companies prefer to negotiate with the bank and negotiate with it over negotiating with 10 different parties, each with its own requests and requirements during these periods.
In the first half of the year the process that everyone expected but actually was surprised when it happened actually happened. For example, when bond yields began to rise, investors did not want to put money into the bond market in the belief that yields would continue to rise or at least stabilize at higher levels. This has made companies realize that at the moment at least, the bond market has dried up unless you are a bank.
S&P Maalot says that in June the situation worsened "The issuance activity of the business sector (excluding financial) was particularly poor, the monthly issuance volume of companies from the real estate sector was the lowest since the beginning of the year and amounted to NIS 1.9 billion (compared to NIS 2.6 billion). In the corresponding period last year).
"The volume of issues in the financial sector amounted to NIS 2.7 billion, with the issue of Discount Bank being the largest in terms of NIS 2 billion. The volume of aggregate monthly raising (business and financial sector) amounted to NIS 4.5 billion, compared with NIS 5.8 billion NIS 8 billion in May and April, respectively.