Market experts said generally development bonds get good response due to lack of availability of such instruments in the market. It is not clear whether CBO will come out with another bond issue this year as government does not need to raise domestic debt to meet budget deficit. However, development bonds worth RO40 million will mature in August this year.

The bonds are direct and unconditional obligations of the government, which can be used as a collateral security to obtain loans from any local licensed bank.

The development bond will be listed on the Muscat Securities Market (MSM) soon, which ensures liquidity of the instrument.

According to market officials, the trading of government development bonds on the bourse is limited, mainly due to lack of interest among investing banks and other high net worth individuals. Investors generally prefer to hold bonds in view of high yield and security.


Market officials said the Central Bank of Oman may think of issuing sukuks (sharia compliant debt instruments) next year, with the government opening up the financial sector for Islamic finance.

Also, market official said that there is a need for more and more government bond issues to have a benchmark interest rate, which helps banks to determine their interest rates for different instruments, Times of Oman reported.