Middle East Turmoil Beaten by Argentine Inflation in Yields: Arab Credit - Bloomberg

Middle Eastern bonds have been offering a lower yield premium than Latin American debt for the longest stretch in six years, as Argentine and Venezuelan inflation concerns investors more than Arab uprisings.

The spread over U.S. Treasury bonds has been narrower for Middle East debt than for securities issued in Latin America since Nov. 12, JPMorgan Chase & Co. data show. Corporate bonds in the Middle East are also returning more this year.

While many Latin American economies are transparent and well managed, “growth is the next hurdle for some countries there because of inflation,” Stuart Culverhouse, chief economist at Exotix Ltd. in London, said in a telephone interview. Middle Eastern borrowers, meanwhile, have enjoyed renewed investor confidence after Dubai last year avoided default by renegotiating almost $25 billion in debt, he said.

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