Fixed Income: Returns pressured by interest rate rises, but index inclusion could drive more investment into GCC bonds | ZAWYA MENA Edition

Fixed Income: Returns pressured by interest rate rises, but index inclusion could drive more investment into GCC bonds | ZAWYA MENA Edition:

Rising interest rates roiled debt markets worldwide this year, although higher hydrocarbon revenues enabled Gulf bonds and sukuk to fare better, and the region’s imminent inclusion in widely-followed fixed income benchmarks suggests a late-year rebound could extend into 2019.

Bond and sukuk issuance in the six-nation Gulf Cooperation Council (GCC) this year totalled $77 billion as of Dec. 10, down from $85 billion in the prior-year period, according to data from Emirates NBD, as shrinking budget deficits reduced the need for governments to sell debt.

Meanwhile, the Barclays GCC Credit + High Yield Index had a total 2018 return of 0.03 percent as of Dec. 7; the Bloomberg Barclays U.S. Corporate Total Return Index was down 3.18 percent over the same period.