The US dollar peg has symbolically been an anchor of the GCC’s recent economic history. Ryan Carter / The National
The US dollar peg has symbolically been an anchor of the GCC’s recent economic history. Ryan Carter / The National

Market analysis: Euro offers alternative for region’s debt needs

The US dollar peg has symbolically been an anchor of the GCC’s recent economic history. Oil, which is priced in dollars, has been its main export and, as a result, the US currency has come to define the region’s trade relationships and forged proximity with the US.

With the sustained drop in oil prices probably ushering in a new paradigm of structural change, rather than a short-term bump in the road, debt is becoming an essential element of GCC governments’ economic policies. While all financing at the sovereign level has so far been in US dollars, there is a growing case for sovereigns, sovereign-related entities and high-rated corporates to begin considering the euro as an alternative.

The main case for euro funding is that the demand for financing has grown and is still growing significantly, making diversification away from US dollars into alternative sources of funding a prudent measure.

Last year, sovereign borrowing, both loans and bonds, soared more than fivefold to US$50.3 billion from $9.1bn in 2015, according to data from Dealogic. The real growth has been in bonds: $38.7bn in notes were issued in last year, more than 10 times previous years’ volumes ($3.2bn in 2015, $3.5bn in 2014, and $3.3bn in 2013).

Abu Dhabi’s $5bn bond issue in April was its first since the financial crisis in 2009. Qatar’s $9bn in May was the biggest ever in the region until Saudi Arabia came to the international bond market for the first time in October and secured $17.5bn in the largest bond sale ever from an emerging market borrower.

This trend is expected to continue. Kuwait has indicated that it will seek to issue $10bn of bonds this year. Meanwhile Saudi Arabia is planning a multi-year programme of debt issuance.

GCC sovereign financing needs could total $560bn between 2015 and 2019, according to a report by S&P, without taking into account debt required by government-related entities and the region’s corporates.

Diversifying into euro-denominated debt allows borrowers to access a separate pool of credit investors, predominantly continental European insurers, pension funds, asset managers and hedge funds, who all have sizeable euro-denominated liabilities.

Recent examples of GCC euro-denominated bond issuers are Emirates NBD; Etisalat, to help finance the purchase of Maroc Telecom, as the Moroccan dirham references the euro; and Ipic, which merged with Mubadala, and the two have significant euro exposure through their sizeable holdings of European assets.

The euro-denominated bond market is after all the deepest, globally, after the US dollar: last year about $1.1 trillion equivalent was issued in euros, versus about $2.7tn in US dollars.

Enlarging the pool of available liquidity is a key rationale for diversification. Indeed, if US dollar volumes remain as high or increase in the future, there is a risk of stretching the dollar market as a single source of funding; the euro-denominated bond market is thus the next large market to open for such rainy days.

To gain access to this market, borrowers are advised to create an initial euro benchmark issue, which they could later use as a pricing point to leverage at times of excessive US dollar bond issuance. Such a strategy entails investment of management’s time to allow for marketing to the new investor base. But it also acts as an insurance policy against exposure to a single source of funding and as a debt management tool.

Aside from diversification, there are other reasons for sovereigns and large corporates to strongly consider borrowing in euros.

European suppliers, contractors and asset purchases have become increasingly important for the region over the years, because they are focused on the infrastructure market that is relevant to the GCC.

The euro’s 25 per cent or so devaluation against the dollar over the past two years has made European suppliers even more competitive and while contracts have not been necessarily euro-denominated in the past, increasingly exporters are pushing to use their own currency for payment. And given the shifting economic, political and geopolitical dynamics, we may see a rebalance of external economic policies of the GCC towards other regions and particularly Europe, which would translate into more strategic investment and sourcing of strategic goods from there.

To be sure there are challenges. There is a limited emerging market-dedicated investor base in euros, as emerging market funds tend to be US dollar-denominated. And some euro investors have restrictions in their ability to invest in non-OECD jurisdictions. However, these are parameters that can and should change in the future.

As such, there is real economic merit in looking at the euro as the next deepest pool of liquidity that can be tapped over the medium term, especially by the better-rated GCC borrowers. It is an attractive solution for the region at a time when it is becoming evermore dependent on debt and evermore sophisticated at managing its debt requirements. By opening up to euro funding, first movers, sovereigns or corporates, would definitely gain in flexibility to navigate their way through the new cycle.

Richad Soundardjee is the chief executive of Société Générale Middle East.

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Director: Carol Mansour

Starring: Aida Abboud, Carol Mansour

Rating: 3.5./5


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Company profile

Name: Yodawy
Based: Egypt
Founders: Karim Khashaba, Sherief El-Feky and Yasser AbdelGawad
Total funding: $24.5 million
Investors: Algebra Ventures, Global Ventures, MEVP and Delivery Hero Ventures, among others
Number of employees:

Mission: Impossible - Dead Reckoning Part One

Director: Christopher McQuarrie
Stars: Tom Cruise, Hayley Atwell, Pom Klementieff, Simon Pegg
Rating: 4/5


Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates

Attacks on Egypt’s long rooted Copts

Egypt’s Copts belong to one of the world’s oldest Christian communities, with Mark the Evangelist credited with founding their church around 300 AD. Orthodox Christians account for the overwhelming majority of Christians in Egypt, with the rest mainly made up of Greek Orthodox, Catholics and Anglicans.

The community accounts for some 10 per cent of Egypt’s 100 million people, with the largest concentrations of Christians found in Cairo, Alexandria and the provinces of Minya and Assiut south of Cairo.

Egypt’s Christians have had a somewhat turbulent history in the Muslim majority Arab nation, with the community occasionally suffering outright persecution but generally living in peace with their Muslim compatriots. But radical Muslims who have first emerged in the 1970s have whipped up anti-Christian sentiments, something that has, in turn, led to an upsurge in attacks against their places of worship, church-linked facilities as well as their businesses and homes.

More recently, ISIS has vowed to go after the Christians, claiming responsibility for a series of attacks against churches packed with worshippers starting December 2016.

The discrimination many Christians complain about and the shift towards religious conservatism by many Egyptian Muslims over the last 50 years have forced hundreds of thousands of Christians to migrate, starting new lives in growing communities in places as far afield as Australia, Canada and the United States.

Here is a look at major attacks against Egypt's Coptic Christians in recent years:

November 2: Masked gunmen riding pickup trucks opened fire on three buses carrying pilgrims to the remote desert monastery of St. Samuel the Confessor south of Cairo, killing 7 and wounding about 20. IS claimed responsibility for the attack.

May 26, 2017: Masked militants riding in three all-terrain cars open fire on a bus carrying pilgrims on their way to the Monastery of St. Samuel the Confessor, killing 29 and wounding 22. ISIS claimed responsibility for the attack.

April 2017: Twin attacks by suicide bombers hit churches in the coastal city of Alexandria and the Nile Delta city of Tanta. At least 43 people are killed and scores of worshippers injured in the Palm Sunday attack, which narrowly missed a ceremony presided over by Pope Tawadros II, spiritual leader of Egypt Orthodox Copts, in Alexandria's St. Mark's Cathedral. ISIS claimed responsibility for the attacks.

February 2017: Hundreds of Egyptian Christians flee their homes in the northern part of the Sinai Peninsula, fearing attacks by ISIS. The group's North Sinai affiliate had killed at least seven Coptic Christians in the restive peninsula in less than a month.

December 2016: A bombing at a chapel adjacent to Egypt's main Coptic Christian cathedral in Cairo kills 30 people and wounds dozens during Sunday Mass in one of the deadliest attacks carried out against the religious minority in recent memory. ISIS claimed responsibility.

July 2016: Pope Tawadros II says that since 2013 there were 37 sectarian attacks on Christians in Egypt, nearly one incident a month. A Muslim mob stabs to death a 27-year-old Coptic Christian man, Fam Khalaf, in the central city of Minya over a personal feud.

May 2016: A Muslim mob ransacks and torches seven Christian homes in Minya after rumours spread that a Christian man had an affair with a Muslim woman. The elderly mother of the Christian man was stripped naked and dragged through a street by the mob.

New Year's Eve 2011: A bomb explodes in a Coptic Christian church in Alexandria as worshippers leave after a midnight mass, killing more than 20 people.


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Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

Friday's schedule in Madrid

Men's quarter-finals

Novak Djokivic (1) v Marin Cilic (9) from 2pm UAE time

Roger Federer (4) v Dominic Thiem (5) from 7pm

Stefanos Tsitsipas (8) v Alexander Zverev (3) from 9.30pm

Stan Wawrinka v Rafael Nadal (2) from 11.30pm

Women's semi-finals

Belinda Bencic v Simona Halep (3) from 4.30pm

Sloane Stephens (8) v Kiki Bertens (7) from 10pm


Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

The Bloomberg Billionaire Index in full

1 Jeff Bezos $140 billion
2 Bill Gates $98.3 billion
3 Bernard Arnault $83.1 billion
4 Warren Buffett $83 billion
5 Amancio Ortega $67.9 billion
6 Mark Zuckerberg $67.3 billion
7 Larry Page $56.8 billion
8 Larry Ellison $56.1 billion
9 Sergey Brin $55.2 billion
10 Carlos Slim $55.2 billion


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Starring: Glenn Powell, Daisy Edgar-Jones, Anthony Ramos

Rating: 2.5/5

Armies of Sand

By Kenneth Pollack (Oxford University Press)


Swansea 2

Grimes 20' (pen), Celina, 29'

Man City 3

Silva 69', Nordfeldt 78' (og), Aguero 88'

UAE currency: the story behind the money in your pockets
The years Ramadan fell in May





The years Ramadan fell in May






Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2


Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

Confirmed bouts (more to be added)

Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez

Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through and


Copa del Rey, semi-final second leg

Real Madrid 0
Barcelona 3 (Suarez (50', 73' pen), Varane (69' OG)

The biog

Name: Capt Shadia Khasif

Position: Head of the Criminal Registration Department at Hatta police

Family: Five sons and three daughters

The first female investigator in Hatta.

Role Model: Father

She believes that there is a solution to every problem


England squad

Moeen Ali, James Anderson, Jofra Archer, Jonny Bairstow, Dominic Bess, James Bracey, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Ben Foakes, Lewis Gregory, Keaton Jennings, Dan Lawrence, Jack Leach, Saqib Mahmood, Craig Overton, Jamie Overton, Matthew Parkinson, Ollie Pope, Ollie Robinson, Joe Root, Dom Sibley, Ben Stokes, Olly Stone, Amar Virdi, Chris Woakes, Mark Wood

The biog

Favourite food: Fish and seafood

Favourite hobby: Socialising with friends

Favourite quote: You only get out what you put in!

Favourite country to visit: Italy

Favourite film: Lock Stock and Two Smoking Barrels.

Family: We all have one!


Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

The Specs

Engine: 1.6-litre 4-cylinder petrol
Power: 118hp
Torque: 149Nm
Transmission: Six-speed automatic
Price: From Dh61,500
On sale: Now

Director: Shady Ali
Cast: Boumi Fouad , Mohamed Tharout and Hisham Ismael
Rating: 3/5

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