Data from the London Stock Exchange Group shows a significant increase in bond issuances in the Middle East and North Africa region, rising by 20% to $126 billion in the first nine months of this year. These issuances have seen strong demand from Asian investors, particularly Chinese investors seeking to reallocate their investment portfolios away from the US market.
In a related context, syndicated loans to the Middle East from the Asia-Pacific region have seen a significant increase of more than threefold, exceeding $16 billion since the beginning of the year. This trend reflects investors’ desire for higher returns while reducing risk, which the Gulf countries provide through government and quasi-government debt instruments with strong credit ratings.
Strengthening trade relations between the Gulf countries and Asian countries contributes to supporting this trend, with trade volume between them increasing to $516 billion, making the region closer to Asian markets compared to Western markets.
Analysts confirm that Gulf bonds remain more attractive compared to most Asian bonds, offering higher yields compared to other debt instruments with similar ratings. Some Gulf borrowers are considering issuing bonds in yuan in the Chinese market.
According to bankers’ statements, Asian institutions’ allocations to Gulf bonds have increased to between 15 and 20%, compared to only 5 to 7% last year, indicating a clear investment shift towards the region.
(Reuters)
