Gulf Arab nations approach 2021 with their currency pegs steadied, oil prices clawing back ground, and bond investors keen for the region’s high-rated, high-yielding names.
But the pain from Covid-19 and the slump in crude hasn’t gone, and S&P Global Ratings predicts only a “modest recovery” in the six-nation Gulf Cooperation Council through 2023, after a contraction of about 6% this year. And while the region’s markets are used to geopolitical ructions, investors are waiting to see how Joe Biden’s presidency might tilt the picture, according to Tarek Fadlallah, the Dubai-based chief executive officer of the Middle East unit of Nomura Asset Management.
Here are some of the themes investors will be watching in the Gulf:
Bond Binge, Part 2
Governments and companies in the GCC will issue about $120 billion of dollar debt and Islamic securities in 2021, according to Franklin Templeton. That compares with a record $127 billion this year.
The United Arab Emirates will dominate corporate sales, with Saudi Arabia and Qatar leading among sovereign issuers, said Mohieddine Kronfol, Dubai-based chief investment officer for Middle Eastern and North African fixed income at Franklin Templeton. Kuwait will be a “large contributor” to the region’s offerings if it renews a debt law that lapsed after its debut Eurobond issuance in 2017, Kronfol said.
Bond Binge, Part 2
Governments and companies in the GCC will issue about $120 billion of dollar debt and Islamic securities in 2021, according to Franklin Templeton. That compares with a record $127 billion this year.
The United Arab Emirates will dominate corporate sales, with Saudi Arabia and Qatar leading among sovereign issuers, said Mohieddine Kronfol, Dubai-based chief investment officer for Middle Eastern and North African fixed income at Franklin Templeton. Kuwait will be a “large contributor” to the region’s offerings if it renews a debt law that lapsed after its debut Eurobond issuance in 2017, Kronfol said.
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