Saturday 19 February 2011

Saudi Arabia Default Swaps Jump on Bahrain Contagion Concerns

Credit-default swaps on Saudi Arabia surged on concern political unrest in neighboring Bahrain will spread to the world's biggest oil exporter.

Swaps on Saudi Arabia, used as a measure of confidence in the country although they reference no debt, jumped 10.5 basis points to 137, the highest since July 2009, according to CMA. Contracts on Bahrain rose for a fifth day, climbing 18 basis points to 302, the highest in 17 months.

Governments are cracking down on pro-democracy activists as uprisings that toppled autocratic leaders in Tunisia and Egypt spread to Libya, Iran, Algeria and Yemen. Clashes in Bahrain, a close Saudi ally, may increase as regime supporters and opposition protesters stage counter-demonstrations after the funeral of two men killed by security forces.



Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/02/17/bloomberg1376-LGT5O40YHQ0X01-28HPP87PSKLA4QA4SPDIUL2EBP.DTL#ixzz1ENX4QZon

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