U.A.E. Bonds Gain as Fuel-Subsidy Halt Boosts Abu Dhabi Coffers - Bloomberg Business

U.A.E. Bonds Gain as Fuel-Subsidy Halt Boosts Abu Dhabi Coffers - Bloomberg Business:



"OPEC’s third-biggest oil producer just ended fuel subsidies and investors are rewarding the move.



While the average yield on developing-country debt has increased 13 basis points since the July 22 announcement of fuel-price deregulation in the United Arab Emirates, the yield on bonds of Abu Dhabi, the richest of the country’s seven sheikhdoms, has declined four basis points. The yield on bonds of the neighboring emirate of Dubai maturing in 2018 fell 1 basis point over the period.



With about 6 percent of the world’s proven oil reserves, the U.A.E. became the first country in the Persian Gulf region to scrap fuel subsidies as it seeks to shore up government coffers amid a plunge in crude prices in the past year. Budgets of the six-nation Gulf Cooperation Council depend on income from oil sales to prop up spending aimed at maintaining social stability after revolts toppled governments in Tunisia, Egypt and Libya."



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