U3F1ZWV6ZTQ2NTY5MDk2NTY1X0FjdGl2YXRpb241Mjc1NjM2MTE2Njg=
recent
Hot News

Bond Demand in Gulf Compared to Stocks Is `Like Mars and Venus'.................

The Gulf is proving to be fertile ground for debt investors.
Yield-hungry global funds are plowing into regional bonds at the expense of local stock markets, where liquidity has dwindled following the 2014 oil-price crash. The last initial public offering in the United Arab Emirates was in 2017.
Once debt-averse, the petrostates of the Gulf have pivoted to borrowing to plug ballooning budget deficits. They’ve tried to cut capital spending and slash subsidies -- steps that helped shore up finances but spelled trouble for equity investments as austerity undermined consumer spending and credit growth.




“When it comes to looking at bond and equity markets in the Middle East, it is like Mars and Venus,” Richard Lacaille, the chief investment officer at State Street Global Advisors, said in Riyadh. “The interest from bond investors is very clear: they want a little bit of spread, they want diversified assets, and they want liquidity.”

The bond buyer’s Gulf couldn’t be more different from the place shunned by stock pickers for its lack of corporate transparency and market selloffs driven by knee-jerk retail traders. Borrowers in the Gulf Cooperation Council, comprising six monarchies including Saudi Arabia, are now among the biggest issuers in emerging markets, with sales of bonds and Islamic securities tripling in the first four months of this year from 2016.
The Gulf is proving to be fertile ground for debt investors.
Yield-hungry global funds are plowing into regional bonds at the expense of local stock markets, where liquidity has dwindled following the 2014 oil-price crash. The last initial public offering in the United Arab Emirates was in 2017.
Once debt-averse, the petrostates of the Gulf have pivoted to borrowing to plug ballooning budget deficits. They’ve tried to cut capital spending and slash subsidies -- steps that helped shore up finances but spelled trouble for equity investments as austerity undermined consumer spending and credit growth.




“When it comes to looking at bond and equity markets in the Middle East, it is like Mars and Venus,” Richard Lacaille, the chief investment officer at State Street Global Advisors, said in Riyadh. “The interest from bond investors is very clear: they want a little bit of spread, they want diversified assets, and they want liquidity.”

The bond buyer’s Gulf couldn’t be more different from the place shunned by stock pickers for its lack of corporate transparency and market selloffs driven by knee-jerk retail traders. Borrowers in the Gulf Cooperation Council, comprising six monarchies including Saudi Arabia, are now among the biggest issuers in emerging markets, with sales of bonds and Islamic securities tripling in the first four months of this year from 2016.
NameEmailMessage