The yield on Dubai's Islamic bond fell the most in more than a year last week, leading a rally in Arabian Gulf sukuk, as government-related companies complete debt restructurings and posted better-than-expected earnings.
The yield on Dubai’s 6.396 percent dollar sukuk due in November 2014 fell to a record low 5.59 percent March 25, taking the weekly decline to 57 basis points, the most since the week ended March 5, 2010, data compiled by Bloomberg show. The difference in yield between Dubai’s Islamic note and the Malaysian government’s 3.928 percent Islamic note due June 2015 dropped 72 basis points, or 0.72 percentage point, to 275, the lowest on record, the data shows.
Dubai World, the state-owned holding company that sought to alter the terms on about $25bn of debt, signed a final accord with lenders last week, overcoming investors’ concern the emirate may default on borrowings. Government-controlled DP World Ltd, the world’s fourth-biggest port operator, reported a 13 percent increase in profit last year as global trade rose.
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