Global investors are buying up Abu Dhabi and Qatar government debt as a haven against tumbling stock markets, pushing yields on the bonds to historic lows.
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The trend has been building for weeks now, sending some Gulf government bonds to their lowest-ever yields. The plunge also marks a sharp reversal of high yields seen when the government-owned group Dubai World announced a debt repayment standstill two years ago. Bond yields move inversely to prices.
"People are fleeing to safe assets, and Qatar and Abu Dhabi bonds are seen as safe assets," said Abdul Kadir Hussain, the chief executive of Mashreq Capital in Dubai.
Abu Dhabi government bonds maturing in 2019 are yielding about 3.2 per cent, down from 4.8 per cent six months ago. Qatari bonds that also mature in 2019 are yielding 3 per cent, less than half of their 6.5 per cent yield when they were first sold in 2009.
Those yields come as investors worldwide ditch stocks in favour of gold and government bonds that are regarded as more secure.
Stock markets across Europe have shed more than 20 per cent of their value in the past month amid renewed concern about government debts and worry that a recession will recur. Gold on Friday reached a record high of US$1,878 an ounce. Another factor driving investors into Middle Eastern bonds, investors say, is that their yields are still higher than those on US or UK government debt, giving Gulf government bonds the added prospect of higher returns.
While 10-year US Treasury bonds are yielding about 2 per cent, comparable bonds in Qatar and Abu Dhabi are putting up 3 per cent yields. The same dynamic holds up across other maturities, with Abu Dhabi's five-year bonds yielding 1.4 per cent versus five-year US treasury yields under 1 per cent.
"When you look at these yields in terms of absolute yields, it doesn't look very attractive, but when you look at it from a relative standpoint it becomes an easy and safe place to park your cash," Mr Hussain said.
Bond yields have declined not only in government bonds but also in debt issued by state-controlled companies.
Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, has seen yields on its 10-year bonds sink to 3.9 per cent from 4.9 per cent in March. Yields on 10-year bonds sold by Abu Dhabi's International Petroleum Investment Company are at 4.5 per cent, their lowest level since they were issued last year.
The trend has taken hold to some degree across the Middle East. The average yield on Middle Eastern government debt has dropped 0.17 percentage points this month to 4.67 per cent, according to Bloomberg News figures, reaching its lowest point since November.
Lower yields can stimulate new bond sales, since they serve as a guideline for the interest rates investors are demanding. Lower interest rates mean cheaper borrowing for companies and governments.
Michael Grifferty, the president of the Gulf Bond and Sukuk Association, said lower yields were "a plus" for the region, adding that he expected a rise in regional bond sales this year. He said, however, it would probably take a more prolonged period of low yields to invigorate the market.
"The yields have an effect, but we would need sustained low yields, more stability and factors that go well beyond the region," Mr Grifferty said. "People have to make plans and follow through on them, but you can't just jump into the market and be ready at any opportunity. You can if you're ready, but financing plans need time."
Abu Dhabi and Qatar have some of the region's highest credit ratings, and they are seen as safe because of their large reserves of oil - and the huge oil savings they could tap in case of crisis. Abu Dhabi and Qatar both have "AA" ratings from Standard & Poor's at a time when fear is running high about sovereign debt in the wake of the agency's recent downgrading of America's top-tier "AAA" rating.
Many observers expect the trend of lower yields to continue as long as global uncertainty persists. But Mr Hussain said there was a risk that yields could go back up if world markets went into a tailspin and investors started to withdraw money from emerging-market bond investment funds.
"If emerging market funds start to see outflows, then you will have a situation where some of these [Middle Eastern] bonds will be some of the easiest for these bond managers to sell because they are liquid and there is demand for them," he said.
afitch@thenational.ae
At a glance - Zayed Sustainability Prize 2020
Launched: 2008
Categories: Health, energy, water, food, global high schools
Prize: Dh2.2 million (Dh360,000 for global high schools category)
Winners’ announcement: Monday, January 13
Impact in numbers
335 million people positively impacted by projects
430,000 jobs created
10 million people given access to clean and affordable drinking water
50 million homes powered by renewable energy
6.5 billion litres of water saved
26 million school children given solar lighting
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Company%20Profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Ovasave%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20November%202022%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Majd%20Abu%20Zant%20and%20Torkia%20Mahloul%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Abu%20Dhabi%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Healthtech%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%20Three%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%3Cbr%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20%24400%2C000%3C%2Fp%3E%0A
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Bio
Born in Dubai in 1994
Her father is a retired Emirati police officer and her mother is originally from Kuwait
She Graduated from the American University of Sharjah in 2015 and is currently working on her Masters in Communication from the University of Sharjah.
Her favourite film is Pacific Rim, directed by Guillermo del Toro
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
Mountain%20Boy
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Zainab%20Shaheen%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Naser%20Al%20Messabi%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3C%2Fstrong%3E%3A%203%2F5%3C%2Fp%3E%0A
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
The specs
Engine: 2.2-litre, turbodiesel
Transmission: 6-speed auto
Power: 160hp
Torque: 385Nm
Price: Dh116,900
On sale: now
The specs
Engine: 3-litre twin-turbo V6
Power: 400hp
Torque: 475Nm
Transmission: 9-speed automatic
Price: From Dh215,900
On sale: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Essentials
The flights: You can fly from the UAE to Iceland with one stop in Europe with a variety of airlines. Return flights with Emirates from Dubai to Stockholm, then Icelandair to Reykjavik, cost from Dh4,153 return. The whole trip takes 11 hours. British Airways flies from Abu Dhabi and Dubai to Reykjavik, via London, with return flights taking 12 hours and costing from Dh2,490 return, including taxes.
The activities: A half-day Silfra snorkelling trip costs 14,990 Icelandic kronur (Dh544) with Dive.is. Inside the Volcano also takes half a day and costs 42,000 kronur (Dh1,524). The Jokulsarlon small-boat cruise lasts about an hour and costs 9,800 kronur (Dh356). Into the Glacier costs 19,500 kronur (Dh708). It lasts three to four hours.
The tours: It’s often better to book a tailor-made trip through a specialist operator. UK-based Discover the World offers seven nights, self-driving, across the island from £892 (Dh4,505) per person. This includes three nights’ accommodation at Hotel Husafell near Into the Glacier, two nights at Hotel Ranga and two nights at the Icelandair Hotel Klaustur. It includes car rental, plus an iPad with itinerary and tourist information pre-loaded onto it, while activities can be booked as optional extras. More information inspiredbyiceland.com
Company profile
Company name: Dharma
Date started: 2018
Founders: Charaf El Mansouri, Nisma Benani, Leah Howe
Based: Abu Dhabi
Sector: TravelTech
Funding stage: Pre-series A
Investors: Convivialite Ventures, BY Partners, Shorooq Partners, L& Ventures, Flat6Labs
THREE
%3Cp%3EDirector%3A%20Nayla%20Al%20Khaja%3C%2Fp%3E%0A%3Cp%3EStarring%3A%20Jefferson%20Hall%2C%20Faten%20Ahmed%2C%20Noura%20Alabed%2C%20Saud%20Alzarooni%3C%2Fp%3E%0A%3Cp%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
MATCH INFO
Manchester City 2 (Mahrez 04', Ake 84')
Leicester City 5 (Vardy 37' pen, 54', 58' pen, Maddison 77', Tielemans 88' pen)
Man of the match: Jamie Vardy (Leicester City)
The Transfiguration
Director: Michael O’Shea
Starring: Eric Ruffin, Chloe Levine
Three stars
THE SPECS
Engine: 6.0-litre, twin-turbocharged W12
Transmission: eight-speed automatic
Power: 626bhp
Torque: 900Nm
Price: Dh1,050,000
On sale: now
TICKETS
For tickets for the two-day Maharlika Pilipinas Basketball League (MPBL) event, entitled Dubai Invasion 2019, on September 27 and 28 go to www.meraticket.com.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
UAE currency: the story behind the money in your pockets
MATCH INFO
Euro 2020 qualifier
Russia v Scotland, Thursday, 10.45pm (UAE)
TV: Match on BeIN Sports
The stats: 2017 Jaguar XJ
Price, base / as tested Dh326,700 / Dh342,700
Engine 3.0L V6
Transmission Eight-speed automatic
Power 340hp @ 6,000pm
Torque 450Nm @ 3,500rpm
Fuel economy, combined 9.1L / 100km
RIVER%20SPIRIT
%3Cp%3E%3Cstrong%3EAuthor%3A%20%3C%2Fstrong%3ELeila%20Aboulela%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Saqi%20Books%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20320%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Brief scoreline:
Liverpool 2
Mane 51', Salah 53'
Chelsea 0
Man of the Match: Mohamed Salah (Liverpool)
Bob%20Marley%3A%20One%20Love
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If you go
The flights Etihad (www.etihad.com) and Spice Jet (www.spicejet.com) fly direct from Abu Dhabi and Dubai to Pune respectively from Dh1,000 return including taxes. Pune airport is 90 minutes away by road.
The hotels A stay at Atmantan Wellness Resort (www.atmantan.com) costs from Rs24,000 (Dh1,235) per night, including taxes, consultations, meals and a treatment package.
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JOKE'S%20ON%20YOU
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The biog
Born November 11, 1948
Education: BA, English Language and Literature, Cairo University
Family: Four brothers, seven sisters, two daughters, 42 and 39, two sons, 43 and 35, and 15 grandchildren
Hobbies: Reading and traveling
Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
Results
2.30pm Maiden (PA) Dh40,000 1,200m
Winner Lamia, Tadhg O’Shea, Ernst Oertel.
3pm Handicap (PA) Dh40,000 1,000m
Winner Jap Al Afreet, Elione Chaves, Irfan Ellahi.
3.30pm Handicap (PA) Dh40,000 1,700m
Winner MH Tawag, Bernardo Pinheiro, Elise Jeanne.
4pm Handicap (TB) Dh40,000 2,000m
Winner Skygazer, Sandro Paiva, Ali Rashid Al Raihe.
4.30pm The Ruler of Sharjah Cup Prestige (PA) Dh250,000 1,700m
Winner AF Kal Noor, Tadhg O’Shea, Ernst Oertel.
5pm Sharjah Marathon (PA) Dh70,000 2,700m
Winner RB Grynade, Bernardo Pinheiro, Eric Lemartinel.
CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
If you go...
Etihad Airways flies from Abu Dhabi to Kuala Lumpur, from about Dh3,600. Air Asia currently flies from Kuala Lumpur to Terengganu, with Berjaya Hotels & Resorts planning to launch direct chartered flights to Redang Island in the near future. Rooms at The Taaras Beach and Spa Resort start from 680RM (Dh597).
Retail gloom
Online grocer Ocado revealed retail sales fell 5.7 per cen in its first quarter as customers switched back to pre-pandemic shopping patterns.
It was a tough comparison from a year earlier, when the UK was in lockdown, but on a two-year basis its retail division, a joint venture with Marks&Spencer, rose 31.7 per cent over the quarter.
The group added that a 15 per cent drop in customer basket size offset an 11.6. per cent rise in the number of customer transactions.
Formula%204%20Italian%20Championship%202023%20calendar
%3Cp%3EApril%2021-23%3A%20Imola%3Cbr%3EMay%205-7%3A%20Misano%3Cbr%3EMay%2026-28%3A%20SPA-Francorchamps%3Cbr%3EJune%2023-25%3A%20Monza%3Cbr%3EJuly%2021-23%3A%20Paul%20Ricard%3Cbr%3ESept%2029-Oct%201%3A%20Mugello%3Cbr%3EOct%2013-15%3A%20Vallelunga%3C%2Fp%3E%0A
How to get there
Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
