Qatar’s Bonds Best Performers in August on Flight to Quality: Arab Credit - Bloomberg

Qatar’s sovereign bonds were the best performers in the Middle East in August as investors sought refuge from a slowing U.S. economy and a worsening debt crisis in Europe.

Four of the five best-performing securities among the 32 that make up the HSBC/NASDAQ Dubai Middle East Conventional Sovereign Bond Index were from Qatar. The fifth was from Abu Dhabi. The total return on Qatar’s 6.4 percent bond due 2040 was 7.25 percent last month, according to data compiled by Bloomberg. The JPMorgan Emerging Markets Bond Index returned 0.22 percent. U.S. government bonds had a return of 2.8 percent in August, the most since December 2008, according to a Bank of America Corp. index.

“There has been a global flight to quality since July as macroeconomic conditions deteriorated in the U.S. and Europe,” Gus Chehayeb, a Dubai-based associate director at investment bank Exotix Ltd., said in an e-mailed response to questions yesterday. “Bond investors shifted funds into regional sovereigns with the cleanest and strongest balance sheets, and for Middle East-focused investors this meant a capital flight into Qatar and Abu Dhabi.”

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