IslamicFinance.de

For several years, bonds from the six-nation Gulf Cooperation Council appeared almost immune to global instability, handily outperforming debt from other emerging markets. Unlike most of the world, GCC governments enjoyed big budget surpluses. But as oil hits new six-year lows, most of those surpluses have vanished. Economists expect all GCC states to post fiscal deficits this year, and half of them to post current account deficits. So investors are starting to re-examine their assumptions about the Gulf, and during the last two weeks of global market turmoil, GCC bonds have not escaped a general emerging markets sell-off.