UAE bonds pull away as cash pile beats Opec woes

UAE bonds pull away as cash pile beats Opec woes:



"The slide in oil prices since Opec kept its output targets unchanged last year is failing to curb investor appetite for United Arab Emirates debt, which has outpaced emerging markets amid a dearth of supply.



The average yield on UAE bonds declined eight basis points since the end of November, compared with a seven basis- point increase on the yield on developing-country debt, according to JPMorgan Chase & Co indexes. Bond issuance in the six-nation Gulf Cooperation Council plunged 17% last year to $33.4bn as borrowers turned to the loan market for cheaper financing. Sentiment is also being bolstered by the size of the nation’s cash reserves, according to Ali Soner Guney, a fixed-income fund manager at National Bank of Abu Dhabi.



While oil sank to the lowest level since 2009 this year, the UAE’s cash reserves swelled on the back of crude prices averaging more than $100 a barrel in the three years through 2013. Abu Dhabi, the richest of the seven emirates, is home to the Abu Dhabi Investment Authority, which holds assets estimated at $773bn, according to the Sovereign Wealth Fund Institute."



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