Paste your Google Webmaster Tools verification code here
May 17, 2016 | 12:55 | Dubai
GCC has become a ‘Tale of two spheres’ with credit ratings on UAE, Qatar and Kuwait remaining firmly in the Aa category while those on Saudi Arabia, Oman and Bahrain experiencing free fall and noting multi-notch downgrades, noted the Credit Weekly report by Emirates NBD Global Markets & Treasury. That said, investors have already adjusted their expectations to the weakest link level and bond prices no longer gyrate wildly on announcement of rating downgrades. Last week Moody’s downgrades several entities in the region including the sovereigns of Saudi Arabia (to A3), Oman (to Baa1) and Bahrain (to Ba2) which had minimal impact on secondary market trading prices.
Oil prices rising by 5.4% saw firming up of risk appetite. In addition, better than expected result announcements during the week from Emirates Group, Aldar, TAQA etc boosted investor sentiment which encouraged credit spread tightening for the GCC bonds, the report added.