Emerging debt appetite to give Dubai boost in 2011

Standard Chartered's economist for Middle East and North Africa today said that Dubai should enjoy improved access to global financial markets next year.

Dubai's ability to meet US$18 billion (Dh66bn) in maturing debt next year should be boosted by improved access to global financial markets, say Standard Chartered economists.

Low interest rates and further quantitative easing in the US is likely to dampen the attractiveness of government-backed bonds from the country.

Instead, investors are expected to seek out higher yields offered by emerging market issuances such as the Gulf, according to a report about global economic prospects next year.

"The dynamics of low interest rates play well for the GCC," said Shady Shaher, Standard Chartered economist for Middle East and North Africa. "There's global demand for emerging market issuances."

Dubai is likely to need to tap global markets next year, says the bank, as the emirate faces around $30bn in debt repayments over the next two years related to government and semi-sovereign entities.

Recent months have marked a re-entry of Dubai into international debt markets. A $1.5bn bond issue by the Government was oversubscribed and debt issues by other Dubai entities, such as the ports group DP World and the utilities provider Dubai Electricity and Water Authority, were also well received.