The potential reward for holding riskier developing-nation bonds has almost vanished when compared with Middle Eastern debt, Dana El Baltaji writes for Bloomberg. El Baltaji cites Abdul Kadir Hussain, the head of fixed income at Arqaam Capital, who noted that the average credit risk of emerging-market bonds has been converging with the extra yield investors demand to hold debt in the Arab world. This means that “the potential reward for holding riskier developing-nation bonds has almost vanished when compared with Middle Eastern debt,” he suggests. Hussain says “we’re reducing our risk profile globally, but within the region, we’re looking at lower-rated names, such as companies in Dubai, and sovereign debt in Egypt and Bahrain.”

Elsewhere in the region this morning:

• The “world’s largest IPO” could be delayed to 2019, Bloomberg reports, citing people close to the offering of Aramco shares as suggesting the potentially USD 2 bn transaction is on hold as the Saudi government mulls which international exchange will get the offering and what the outlook on oil prices looks like.
• Moody’s released a report on Wednesday that claims the Qatar crisis is negative for all of those involved. The report says Qatar has poured USD 40 bn, or about 12% of its reserves, into the economy in attempts to prop it up. The Associated Press has more.