IslamicFinance.de

A revival of international bond issues from the Gulf is set to draw heavy demand from local and foreign investors, despite the latest geopolitical upheavals in the Middle East and the approach of higher US interest rates. Gulf bond issuance has dried up since early July, because of a traditional summer lull in local investor activity as well as global market instability due to the crisis in Ukraine. But the vast majority of investors have decided that the geopolitics do not come close to posing any existential threat to the rich Gulf Co-operation Council economies. More than geopolitics, the biggest threat to the Gulf’s primary bond market may be expectations for US interest rates. The currency pegs mean eventual US rate hikes are expected to feed through into official Gulf interest rates quickly.