Persian Gulf Bonds Attract Investors Amid Flight From Europe: Arab Credit - Bloomberg

Qatar, the world’s fastest growing economy, and Abu Dhabi are luring bond investors keen to cut their exposure to markets closer to Europe’s debt crisis.

Yields on Qatar’s sovereign dollar-denominated bonds touched record-lows last week, while the average yield on Persian Gulf notes was nine basis points off the lowest ever on Aug. 5, the HSBC/Nasdaq Dubai GCC Conventional US Dollar Bond Index shows. Sovereign bond yields of Hungary, a European Union member, had their biggest weekly jump since April and Polish debt yields also rose, according to data compiled by JPMorgan Chase & Co.

“I have started in the last three weeks to reduce my exposure to Eastern European countries” and buy into “fundamentally strong countries with solid public finances,” Sergey Dergachev, who oversees $8.5 billion in emerging-market debt at Union Investment Privatfonds in Frankfurt, said by e- mail yesterday. Dergachev said he has been buying Qatar and Abu Dhabi bonds.

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