MIDEAST DEBT-Gulf gets boost as billions pour in before bond index entry | Reuters

MIDEAST DEBT-Gulf gets boost as billions pour in before bond index entry | Reuters:

Government bonds issued by Saudi Arabia and four other Gulf states are outperforming debt from other regions, on expectations their inclusion in JPMorgan’s bond indexes will pull in up to $40 billion in foreign investment.

JPMorgan told investors in September that Saudi Arabia, Qatar, the United Arab Emirates, Bahrain and Kuwait – all members of the Gulf Cooperation Council – would join its emerging-market government bond indexes this year, in phases starting Jan. 31 and running to Sept. 30.

The indexes are performance benchmarks for emerging-market debt; membership can help a country sell bonds and cut borrowing costs. Fund managers estimated index inclusion will generate $30 billion to $40 billion by September.