EMBI inclusion could trigger fund inflows into Qatar - The Peninsula Qatar

EMBI inclusion could trigger fund inflows into Qatar - The Peninsula Qatar:

Potential EMBI (Emerging Market Bond Index) inclusion could lead to an estimated $30bn of inflows into GCC, leading to tighter spreads and making primary market access easier, said the Bank of America Merrill Lynch (BofAML) yesterday.

Potential EMBI inclusion is a swing factor for GCC credit, excluding Oman, BofAML added in its latest Global Emerging Markets Weekly report.

Qatar, Saudi Arabia, UAE, Kuwait, and Bahrain sovereign bonds will make up a sizeable portion of the index. “We estimate 10 - 11 per cent of the EMBI diversified. In theory, flows could reach $40bn which should be supportive for credit performance in the coming months. Sovereigns will also now be able to issue debt to a new audience of EM credit-focused investors, which should increase primary demand,” said Jean-Michel Saliba (pictured), Mena economist at BofAML.