Haven Fever Dims Oil Pain and Fuels Record Month for Gulf Bonds - Bloomberg

Haven Fever Dims Oil Pain and Fuels Record Month for Gulf Bonds - Bloomberg:

Never mind the renewed slump in oil, the global hunt for high-grade dollar debt made August the best month on record for Gulf bonds.

Staring down almost $17 trillion of negative-yielding bonds worldwide, money managers were drawn like never before to a region whose average sovereign credit rating is A+, on par with China, Chile and Ireland. Bonds from all six of the Gulf Cooperation Council nations included in a Bloomberg Barclays index advanced in August, with securities from Saudi Arabia and Qatar leading the pack.

There’s a “flight-to-quality trade within emerging markets,” said Mohammed Elmi, a London-based money manager at Federated Investors U.K., adding that the rally in U.S. Treasuries has provided a tailwind to high-grade Gulf sovereign debt. “It is only natural to trade up the quality curve during these volatile times.”