GCC Bond Monitor May 2019

Performance of GCC bonds during the month of April 2019

GCC primary market was healthy with year-to-date total new issuance in dollar denominated fixed rate bonds exceeding the USD 49 bnmark. Sukukissues lagged steam with only USD 7 bnof new issues so far this year.
•The removal of waivers on Iran sanctions boosted the case for oil prices to rise, thereby boosting sentiment on GCC bonds which recorded credit spread tightening.
•S&P downgraded the outlook on Oman’s BB rating from stable to negative, firmly placing the sovereign on the path for future downgrades.
•Technical bid from inclusion in the JP Morgan EMBI index continued to support GCC Bonds with average credit spread on Bloomberg Barclays GCC index tightening by 17bps from 176bps to 159bps versus the ones on emerging market index tightening only 3bps from 292bps to 289bps during the month of April.
•Sector diversification improved further during the month with maiden issuance from Saudi Telecom.
•Bankruptcy of India’s Jet Airways continued to keep EA Partners in default and its bonds depressed.