Analysts note that with expansionary fiscal policy boosting money supply growth (14.4% y/y in August) and [private-sector] credit expansion, “GCC countries remain well positioned in the event of a global downturn”.  Yet said effects seem especially and comparatively potent in Qatar where, per Barclays, “M3 growth jumped the most, by 24.4% y/y [versus] more moderate growth observed in Saudi Arabia (15% y/y) and the UAE (12.4% y/y), while concurrently headline inflation, which [GCC weighted-average] region wide turned upward for the first time in 2011 in September, remains somewhat subdued given a still shaky real estate sector.  Said M3 jolt, in turn, continues to jostle its way onto regional bank balance sheets, with deposits registering double-digit growth in August–Qatar again leading the pack at 18.6% y/y.  Coupled with 
Abu Dhabi’s International Petroleum Investment Co.’s (IPIC) $3.75b, three-tranche foray into capital markets alongside Union National Bank’s international debt debut, pundits and punters alike now envision a rash or rally of sorts revolving around Abu Dhabi and Qatar issuers in particular given both “ongoing funding needs” as well as a “need to enhance/diversify” said funding bases.  Thus investors eying an increasingly stable and profitable sector (GCC collective average bank ROE stood at 13.9% in June, versus a 2005-2010 average of 18.9%) would be wise to perk up should debt capital markets indeed entice new concessions in the near term.

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