Dubai’s Islamic bonds led a rebound in Persian Gulf sukuk this week, ending the worst stretch of losses in 10 months, as Standard & Poor’s raised its outlook on DP World Ltd. and Qatar won the right to host the World Cup.
Average yields on Shariah-compliant bonds from the Gulf Cooperation Council fell seven basis points, or 0.07 percentage point, to 5.78 percent yesterday, according to the HSBC/NASDAQ Dubai GCC Dollar Sukuk Index. The yield on DP World’s 6.25 percent note maturing in July 2017 dropped 19 basis points this week to 6.96 percent, the lowest level since Nov. 25, according to data compiled by Bloomberg. Yields on sukuk sold by Indonesia and Malaysia rose in the week, tracking U.S. Treasuries.
S&P revised the ratings outlook on the world’s fourth- biggest port operator to “stable” from “negative” on Dec. 2, citing improved financial results and the debt restructuring at its parent, Dubai World. The prospect Qatar’s successful bid will attract international investment and a rally in oil prices bode well for economic growth in the region, according to Manama-based Bahrain Islamic Bank.
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