Standard & Poor’s Ratings Services said today that issuers in the Gulf Cooperation Council (GCC) countries face rising refinancing risks over the next three years because the amount of debt maturing in the region will increase significantly between 2012-2014.

Industry experts estimate bonds and sukuk of about $25 billion will mature in 2012, rising to about $35 billion in 2014. Standard & Poor’s believes the region is therefore entering a challenging loan and bond refinancing cycle, especially given the ongoing volatility in capital markets and fears that slowing global economic growth is already curbing corporate debt issuance and heightening refinancing risk in the region.
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Major international banks from the United States and the European Union are selling off units, restructuring, recapitalising, and shrinking their operations as they comply with stricter regulatory regimes and face poor economic growth in their main markets. In this context, the Gulf, which at one point was an exotic new outpost brimming with petrodollars, no longer seem like an irresistible proposition.
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The UAE which is more aligned than other regional states to global economic cycles, saw its PMI fall from 57.5 in April to 51.0 in July, suggesting that that any further deterioration in global economies will be felt more in the UAE compared to other Gulf states, says Deutsche Bank. READ MORE HERE

Dubai’s bold bid to host the 2024 Olympics is just the tonic for the emirate to regain its mojo, although the emirate’s huge debt pile could come in the way of its investment plans to prepare for the Games. READ MORE HERE

MSCI has kept the door ajar for both Qatar and the UAE, but EFG-Hermes and Citibank analysts disagree whether either market will be elevated come December. Meanwhile, emerging market funds are already swirling around.

The MSCI left the door open for UAE and Qatar to allow them entry into the exclusive emerging markets club. The influential index provider that is used by many funds and investors as a benchmark, said that while both countries did not make the cut this time, they will extend their review till December. READ MORE HERE

Dubai’s economy seems to be gaining momentum once again. But is it a temporary bump due to unrest in other parts of the Middle East or is the recovery on sounder footing? And, can Dubai be great again?

Dubai’s economy, which was once the envy of its regional rivals, has struggled since the global financial crisis. But there are many indicators that suggest the emirate’s economy has turned a corner.
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As safe haven-seeking investors cast their eyes over the political storm in the region, Abu Dhabi appears to be a safe harbour. Read More Here

The GCC has around $40bn of debt coming due each year over the next five years, says Standard Chartered Bank (SCB). Plus a chart that neatly shows SCB’s forecasts returns on each country’s bonds. Read More Here

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