GCC bond market to gain momentum

The Gulf Cooperation Council (GCC) region’s bond market, which saw record sales in the first half of 2016, is expected to continue experiencing an increase in the volume of issuances, according to an analyst note from Indosuez Wealth Management.
The note observed that Saudi Arabia and Kuwait’s inaugural bonds issuance are expected to generate significant interest from a broad range of international investors similar to what was experienced with recently issued bonds from Abu Dhabi and Qatar.
Indosuez Wealth Management added that in the current environment of lower interest rates, the hunt for higher yields and longer bond duration is driving the demand for dollar bonds higher.
This situation is making bonds in high growth markets a top performing asset class, with a growth of 11.5 percent on a year-to-date basis. With the emerging markets bonds compendium at a 12-month high, this rally is being further lifted in recent times by the positive sentiment from the US economic data and the recovery of oil prices. 
Christiane Nasr, director and senior investment adviser, Indosuez Wealth Management, commented: “Despite the strong year-to-date performance, more spread compression in high growth markets could be still achievable by the end of 2016 without ruling out a degree of volatility along the way. In this overall context, the GCC region will increasingly gain more momentum as an attractive and more secure bond market for international institutional investors.”

Source: Arab News