A Tale of Two Gulf Bond Markets Lays Bare Rifts That Run Deep
(Bloomberg) -- Nations in the Gulf are attracting billions of dollars of inflows into their bond markets this year, but beneath the bonanza lies a geopolitical rift that sets the haves and have-nots of the region apart.
Qatar sold a three-part dollar bond offering on Wednesday, a day after Oman was downgraded to junk by Moody's Investors Service. Speculation is growing that the cash-strapped country will need a bailout package from its neighbors, similar to the deal that buoyed Bahrain's finances last year.
But unlike Bahrain, which has a close relationship with Saudi Arabia, Oman's independent foreign policy has left it without support in the region. And neither does Oman have Qatar's deep pockets or gas resources that allowed the nation to skirt a Saudi-led standoff, raised less $24 billion in less than a year and put it on track to post a budget surplus.
The Moody's downgrade to junk isn't Oman's first. The one that really hurt was Fitch Ratings' cut in December, because, coupled with the nation's BB rating by S&P Global Ratings, Omani bonds no longer met some investors' criteria for investment-grade debt. And since the securities are already in JPMorgan Chase & Co.'s emerging-market indexes, they missed out on the excitement over the inclusion of other Gulf nations in the gauges.
A senior government official has since said the nation plans to slash its borrowing requirements for the year.
Read More: Oman Has Work to Do Before a Bond Sale With Ratings All Junk
“Oman is the one GCC name that doesn't benefit from index inclusion. The technicals are the opposite,” said Edwin Gutierrez, a London-based money manager at Aberdeen Standard Investments. And given the downgrade to junk, there are “forced sellers rather than forced buyers.”
To contact the reporter on this story: Netty Ismail in Dubai at nismail3@bloomberg.net
To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Constantine Courcoulas
©2019 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
