Barclays Prefers Qatar Debt, Cautious on Dubai Bonds (Update1) - BusinessWeek

Qatar’s long-term bonds are the best bet for investors because the gas-rich state’s strong finances will likely contain any spillover from the euro debt crisis, Barclays Capital said.

“We see more upside potential for Qatar here and would recommend overweighting Qatar versus Abu Dhabi,” analysts Andreas Kolbe and Alia Moubayed said in a note sent by e-mail today. “We continue to see Qatar as the fundamentally strongest credit in the region and see value in the longer-dated bonds in particular.”

Qatar is the world’s largest producer of liquefied natural gas. The yield on Qatar’s 6.55 percent, fixed-rate bond maturing in 2019 has fallen 112 basis points to 4.643 percent this year, according to Bloomberg bond trader composite prices.