However, that may not necessarily deter investors from future debt issuances, analysts say.
"Dar al Arkan came to market at a difficult time with a rare sub-investment grade [rated] sukuk," said Khalid Howladar, a vice president at Moody's, referring to a recent bond sale by a Saudi property developer. "They paid a high coupon but it's not the rating that decides whether it's successful. In theory a lower rating just means the borrower has to pay a little more but as an investor - as long as you reward me for risk - I'm willing to take it."
Moody's Investors Service lowered Bahrain's ratings to "A3" from "A2" yesterday, citing concerns about rising government spending and a relatively small cushion of oil savings to tide it over through deficits. But economists said yesterday the country remained on a relatively strong fiscal footing. The downgrade, they said, was a means of drawing distinctions between Bahrain and its more oil-rich neighbours.
"The fiscal situation is not something that's alarming," Giyas Gokkent, the chief economist of the National Bank of Abu Dhabi, told Bloomberg, citing low public debt as a portion of GDP. Bahrain's government debt amounts to about 30 per cent of its GDP.
Those low debt levels, though, come at a time when Bahrain continues to spend on major development projects even without a large backstop of oil savings.
That, Moody's said, distinguished the country from its neighbours. While Saudi Arabia, Kuwait and Abu Dhabi are all pursuing ambitious development and spending plans of their own in spite of the financial crisis, they hold hundreds of billions of dollars of oil savings and sit on some of the world's largest oil reserves.
Bahrain, by contrast, has neither large oil reserves or a big pool of savings to draw on in case of government budget deficits.
The country's largest sovereign wealth fund is the Mumtalakat Holding Company, which controlled about US$12.7 billion (Dh46.64bn) of assets at the end of last year, according to its financial statements.
To bring its rating back up, Bahrain may have to rethink how it spends, saves and budgets. Yet Moody's said yesterday there was little room for the country to raise revenues to substitute for the relative dearth of oil savings.
The country's ability to raise revenues was "constrained by the absence of personal income tax and [value-added tax]". Such taxes would be hard to introduce because Bahrain is competing for business with Gulf countries that do not levy them, Moody's said.
The agency also pointed to concerns about Bahrain's banking system, a key fixture of the island country's economy that has come under significant stress because of banks' exposure to property projects.
Foreign investors fled the property sector across the Gulf during the financial crisis, leading to sharp declines in prices.
Several Bahraini investment companies have also fallen on hard times, including Gulf Finance House, the Islamic investment bank that recently announced its seventh straight quarterly loss and is in the middle of a wholesale restructuring of its business.
"Moody's believes that, over the longer term, Bahrain's banking sector will increasingly face competition as other regional financial centres develop," the agency said, adding that although banks were "only a limited contingent liability for the government", they had assets worth about three times the country's GDP.
afitch@thenational.ae
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
The years Ramadan fell in May
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
ALRAWABI%20SCHOOL%20FOR%20GIRLS
%3Cp%3ECreator%3A%20Tima%20Shomali%3C%2Fp%3E%0A%3Cp%3EStarring%3A%C2%A0Tara%20Abboud%2C%C2%A0Kira%20Yaghnam%2C%20Tara%20Atalla%3C%2Fp%3E%0A%3Cp%3ERating%3A%204%2F5%3C%2Fp%3E%0A
Australia tour of Pakistan
March 4-8: First Test, Rawalpindi
March 12-16: Second Test, Karachi
March 21-25: Third Test, Lahore
March 29: First ODI, Rawalpindi
March 31: Second ODI, Rawalpindi
April 2: Third ODI, Rawalpindi
April 5: T20I, Rawalpindi
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Women's Prize for Fiction shortlist
The Silence of the Girls by Pat Barker
My Sister, the Serial Killer by Oyinkan Braithwaite
Milkman by Anna Burns
Ordinary People by Diana Evans
An American Marriage by Tayari Jones
Circe by Madeline Miller
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Review: Tomb Raider
Dir: Roar Uthaug
Starring: Alicia Vikander, Dominic West, Daniel Wu, Walter Goggins
two stars
