What a Difference $10 Billion Aid Makes to Gulf's Weakest Link - Bloomberg

What a Difference $10 Billion Aid Makes to Gulf's Weakest Link - Bloomberg:

Bahrain and Oman are the most vulnerable economies in the Gulf, but one has a $10 billion bailout package and the other is on its own.

That’s why the bonds of Bahrain, whose dwindling foreign-currency reserves fueled concern this year that its currency’s peg to the dollar may be at risk, became 2018’s best performers in the six-nation Gulf Cooperation Council after Saudi Arabia and other rich allies came to the rescue in October.

The aid helped shrink the risk premium that investors demand to hold the island-state’s debt due 2028 over Oman’s to about 40 basis points from an all-time high of 346 basis points in June. That gap will probably narrow further as JPMorgan Chase & Co. starts to include Bahrain’s securities in its emerging-market bond indexes from the end of January.