Bahrain bond 'signals renewed confidence in Gulf'
by This email address is being protected from spam bots, you need Javascript enabled to view it on Thursday, 11 June 2009
Bahrain’s launch of a $750m benchmark sukuk bond was a further sign of a marked return of investor confidence in the Gulf, according to a research note by Standard Chartered Bank released on Thursday.
It follows a flurry of Islamic bond launches over recent months, which would help regional governments fund their economic diversification ambitions, as well as contribute to a much needed deepening of the debt capital markets and the gradual building of a yield curve, the note said.
The amount of Bahrain’s bond was 50 percent higher than what could be expected from earlier government announcements, according to the note.
The kingdom announced on Wednesday the issuance of the bond with a five year maturity at 340 basis points (bps) over US Treasuries.
Governments were able to tap the bond market at levels that were “unthinkable” until recently due to a narrowing of their credit default swap (CDS) spreads.
Dubai’s current CDS spread of 510bps was half its February level, while Abu Dhabi’s CDS spread stood at 250 bps, it said.
Subscription to Abu Dhabi’s issuance in April of $3bn of bonds with a four percent coupon on a five year tenor was a huge success, while Qatar’s issuance of a similar $3bn bond was also well received, the according to the bank.
“This return of investor confidence in the region coupled with a growing risk appetite from offshore investors has helped strengthen the regional bond markets which have seen a flurry of bond issuance both in the sovereigns and corporate space,” it said.
READERS' COMMENTS
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST POLITICS & ECONOMICS
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST POLITICS & ECONOMICS
LATEST MIDDLE EAST BUSINESS NEWS
- Retail: Jeweller closures ‘inevitable’ as gold demand slumps
- Politics & Economics: Abu Dhabi eyes major growth in non-oil sector
- Travel & Hospitality: Oman Air increases free baggage allowance
- Construction & Industry: Abu Dhabi firm in talks to build Iraqi homes mega project
- Retail: UAE grocery sales growth slumps in 2009
SHARE PRICE CHECK
RELATED STORIES
Market Turmoil Focus
3 stories- UAE grocery sales growth slumps in 2009
24 Nov '09 | News - EXCLUSIVE: Boeing chairman sees more job cuts in 2010
19 Nov '09 | News - More UAE bank mergers predicted in 2010 - Ethos
19 Nov '09 | News
Standard Chartered Bank
- StanChart to boost Mideast pvt banking business
19 Nov '09 | News - Senior banker warns UAE job cuts may not be over
1 Nov '09 | News - UAE banks facing up to $11bn liquidity shortfall
13 Oct '09 | News




