GCC sovereigns get ratings boost

The UAE, Abu Dhabi and Kuwait have been rated as the most credit worthy sovereigns among emerging markets by rating agency Moody’s in Emerging Market Chartbook 2020. The three sovereigns were assigned Aa2 ratings while Saudi Arabia was rated as A1 and Sharjah was rated as Baa2. All of the ratings are of investment grade, thereby making any bonds issued by the sovereigns more attractive to global and institutional investors. In all, just 31 of the 106 emerging market sovereigns rated by Moody’s were of investment grade. In addition, 74 sovereigns were given a stable outlook while 24 reflected a negative bias. However, while the Gulf Cooperation Council (GCC) sovereigns compared more favourably to other emerging markets issuers, the Moody’s report warned of difficult times ahead for emerging markets. “The global recession is deepening as coronavirus-related restrictions exact a high economic cost, and we now expect real GDP to contract by 1% for G20 emerging market economies in 2020,” said Denis Perevezentsev, vice president and senior credit officer at Moody’s. “We have already seen a large number of downgrades among high-yield corporates in recent months, reflecting the economic and financial upheaval the coronavirus has inflicted upon emerging markets,” he added. © 2020 funds global mena

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