Middle East bond sell-off widens on Saudi, Lebanese tensions

November 8, 2017 17:07
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LONDON/DUBAI, November 8 - A sell-off in Middle Eastern bond markets escalated on Wednesday with debt prices in Saudi Arabia, Bahrain and Lebanon all touching long-term lows following Saudi Arabia's anti-graft purge and government turmoil in Lebanon.

Some of Saudi Arabia and Bahrain's dollar-denominated bonds fell to their lowest since January, while a number of Lebanon's slumped to their lowest point since being issued as the turbulence spread.

This came as sources told Reuters that Saudi authorities had made further arrests in a swoop on alleged corruption among the kingdom's political and business elite ordered by Crown Prince Mohammed bin Salman.

In the space of two years, the new Saudi leadership has sacked two crown princes, embarked on a military campaign in Yemen, blockaded fellow Gulf state Qatar and rolled back some of its onerous social restrictions.

Saudi international bonds were particularly hit at the long-end of the curve, where foreign investors concentrate their holdings.

A Saudi $6.5 billion dollar bond maturing in 2046 fell a cent to the lowest since March at 97.493 cents, while the $4.5 billion 2047 bond was down more than one cent to a one-month low.

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