Home » wire - Persian Gulf Bond Drop May Be Limited on Demand

08/08/2011 02:26:18 PM GMT   Comments ()     Add a comment   Print     E-mail to friend

 [Bloomberg] The decline in Persian Gulf Islamic bonds, which tumbled the most in 6 months on Aug. 5, may be limited even after the U.S. credit rating cut, Unicorn Investment Bank BSC and Abu Dhabi Commercial Bank PJSC said. The slump pushed the average yield on sukuk in the six-member Gulf Cooperation Council rose 17 bps to 3.85 pct on Aug. 5, the highest in a week, the HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index shows. The downgrade threatens to raise borrowing costs and stall global economic growth, Unicorn Investment Bank and ADCB said. Still, demand for sukuk from the region will provide a “cushion” from the debt woes in the U.S. Last month’s $650 million sukuk sale by First Gulf Bank PJSC, the lender part-owned by Abu Dhabi’s ruling family, received $3.8 billion in orders. “There is still an excess of Islamic money and those fundamentals haven’t changed. Investors still need to park their money somewhere.” omar1.1

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