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Majority of Mena sovereigns stable: S&P

DUBAI, July 14, 2015

Nine out of the 12 Mena sovereigns currently have a stable outlook despite the still-challenging political and economic backdrop, a Standard & Poor’s report said.

Bahrain and Saudi Arabia have negative outlooks, while Egypt has a positive outlook, added the report entitled S&P: Middle East And North Africa Sovereign Rating Trends Mid-Year 2015.

“Our rating outlooks are intended to indicate our view of the potential direction of a long-term credit rating, typically over six months to two years for investment-grade ratings and six months to one year for speculative-grade ratings,” S&P explained.

Overall sovereign creditworthiness in the Mena region is unchanged since February, the report said.

“We have incorporated the sharp drop in oil prices since mid-2014 in the ratings and there have been no further downgrades since those on Bahrain and Oman in February 2015,” it added.

 “We expect the Mena net hydrocarbon importers--Egypt, Jordan, Lebanon, and Morocco--will experience a pick-up in economic growth in 2015-2018 compared with 2011-2014, supported by the boost to their terms of trade related to the fall in oil prices,” S&P said in the report.

“We expect non-oil economic growth will remain relatively robust in the Gulf Cooperation Council (GCC), supported by the respective governments' commitments to capital expenditure programs.

“The average Mena sovereign rating is close to 'BBB+'. When weighted by GDP, however, the average moves closer to 'A' because we rate the larger economies--measured by nominal GDP--higher than the smaller economies.

“These averages mask a clear difference between those sovereigns with a significant hydrocarbon endowment and those without. The average rating for the hydrocarbon-endowed sovereigns of Abu Dhabi, Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia, is currently close to 'A+', while for those with more limited hydrocarbon resources (Egypt, Jordan, Lebanon, Morocco, Ras Al Khaimah, Sharjah) it is closer to 'BB+',” S&P said. – TradeArabia News Service




Tags: S&P | hydrocarbons |

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