Asian Investors Seek Harbor in Gulf Arab Bonds Amid Trade Storm - Bloomberg

Asian Investors Seek Harbor in Gulf Arab Bonds Amid Trade Storm - Bloomberg:

Highly rated dollar bonds from the Middle East are emerging as a refuge for Asian bond investors as they brace for the impact of U.S. sanctions in other regions and the trade row with China.

UOB Asset Management Ltd. and Bank of Singapore Ltd. have turned overweight on Gulf debt over the past year, arguing that the region is less exposed to international trade risks. Investors had sold off Gulf bonds because of falling oil prices, tension between Qatar and a Saudi-led coalition, and Saudi Arabia’s domestic crackdown and foreign policy.

The yield on investment-grade Gulf Cooperation Council nations’ dollar debt with an average rating of A+ has fallen since reaching a 2010-high in November and now trades at a rate that’s similar to Asian securities with an average debt score of A-, according to Bloomberg Barclays indexes. Increasing awareness of better credit quality in the Middle East region, coupled with the fact that Saudi Arabia was the biggest issuer of dollar bonds among emerging markets in 2018 and 2017, have lured investors back.