EMERGING MARKETS-Credit ratings moves hit Gulf stock markets, Kazakh bonds

Вторник, 10 февраля 2015 13:55 MSK

By Chris Vellacott

LONDON Feb 10 (Reuters) - Gulf stocks fell on Tuesday after Standard & Poor's cut credit ratings and outlooks for the region's major oil-producing nations including Saudi Arabia and Bahrain, citing pressure from weaker energy prices.

The Saudi benchmark index was 0.4 percent lower. Dubai dropped 0.7 percent while Abu Dhabi was also marginally weaker. Omani stocks tumbled 0.9 percent, led by a 2 percent fall in its leading lender Bank Muscat

Late on Monday, S&P slashed its forecasts for average oil prices to $55 per barrel for 2015, compared with an earlier estimate of $105, and lowered its rating on Bahrain and Oman and cut its outlook on Saudi Arabia.

"There could be a downward spiral of ratings in some countries in the Gulf, especially in some of the weaker countries such as Oman that have less of a cushion," said Andre Andrijanovs, credit strategist at Exotix.

S&P also cut its rating on Kazakhstan, leaving the country's 2024 $1 billion sovereign bond two cents lower at 88.52 cents in the dollar, according to Tradeweb.

Five-year credit default swaps rose 10 basis points to 308 bps, a two-week high, according to financial data provider Markit.

"With the oil price where it is, it's obvious that ratings will be under pressure. Their economy is so reliant on oil and lacks diversification, plus other (export) commodities such as copper and coal are also under pressure so it was just a matter of time before they got downgraded," Andrijanovs said.

Kazakhstan's tenge currency was flat at 185 per dollar but devaluation pressure has been building and forwards price the currency at 217 in three months time.   Продолжение...