[ad_1]
ABU DHABI/SINGAPORE, Dec 10 – Asian investors are piling into Gulf bonds and loans this year, reflecting both deepening trade and finance ties with the fast-growing region and an uncertain outlook elsewhere, including the world’s top two economies, the United States and China.
Bond issuance in the Middle East and North Africa region jumped 20% year-on-year to $126 billion in the first nine months of this year, according to LSEG data, with full-year records in sight both for the region and broader emerging market debt sales outside China.
That growth, driven largely by the six-member Gulf Cooperation Council, represents both rising financing needs linked to oil- and gas-producing economies’ efforts to diversify, and growing demand from Asian investors reshuffling their portfolios.
“Clearly there has been a shift with Chinese investors actively diversifying away from U.S.-based investments,” said Nour Safa, head of debt capital markets for the Middle East and North Africa at HSBC in Dubai.
Chinese investors have become more comfortable with the region and were now doubling down on investments in both bonds and loans, which have seen particularly strong demand from Asia, Safa said.
Middle East loans syndicated in Asia-Pacific more than tripled to over $16 billion year-to-date from less than $5 billion last year, LSEG data showed.
With China’s economy slowing and Washington’s tariff-centred policies making investors rethink their exposure to the vast pool of U.S. assets, the Gulf appeals with its stability and solid growth prospects.
The IMF projects the region will grow 3.9% this year and growth will accelerate to 4.3% in 2026. In contrast, global growth, projected at 3.2% in 2025, is seen slowing to 3.1% next year.
“Investors are being more cautious about U.S. Treasuries and are diversifying into several alternate markets,” said Oliver Holt, Nomura’s head of debt syndication in Singapore, with high-rated government-backed Middle East issuers often catching investor attention.
Deepening economic ties are also helping with Gulf-Asia trade rising 15% to a record $516 billion last year, around double the value of the region’s trade with the West, according to London-based Asia House.
ASIA TAKES BIGGER BOND ALLOCATIONS
Ritesh Agarwal, Emirates NBD Capital’s head of debt capital markets, said Asian institutions – hedge funds, asset managers and private banks – have driven a rise in the region’s debt allocations over the past 12 to 18 months.
According to Agarwal, average Asian allocation in Gulf debt issues now ranged between 15% and 20%, up from 5% to 7% in early 2024. He said that while the majority of investors were not from mainland China, Chinese capital was flowing through Asian accounts in Hong Kong, Singapore and, for Islamic bonds, Malaysia.
[ad_2]
