A traditional wooden fishing Dhow is seen in port near modern glass and steel buildings on the Doha skyline, Qatar February 9, 2010. REUTERS/Jacky Naegelen
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When that happens, the Gulf's beleaguered bonds will offer refuge.Blighted by political risks in the region, a flood of debt sales and finances that haven't recovered fully from the crash in oil prices, sovereign bonds in the six-nation Gulf Cooperation Council are now attractive compared with similarly rated peers."Although Middle East sovereign issuers remain vulnerable to headline risk, there is already a considerable geopolitical risk premium baked into their asset prices," said Brett Rowley, the Los Angeles-based managing director for emerging markets at TCW, which manages about $200 billion.Crude prices are nowhere near 2014 levels but they have risen, which has improved sentiment toward debt in the GCC, especially given the economic reforms countries such as Saudi Arabia have implemented, TCW Group Inc. and Franklin Templeton Investments said. Gulf bonds offer "excellent value" compared with other similarly rated emerging-market debt, according to Arqaam Capital. Saudi Arabia's bonds maturing in 2047 yielded 5.08 percent, compared with 4.80 percent for a similar security from Indonesia – even though the kingdom is rated four levels higher by Moody's Investors Service.
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