The GCC fixed income market is poised for a dramatic growth, an official of ING Investment Management (ING IM) Middle East said on Monday. “In the coming years we predict significant growth in the size and depth of the GCC debt market, especially fixed income funds. Presently, however, investors are choosing tailor made solutions as a way of increasing exposure to the GCC fixed income market. With our fixed income team now in place, we believe we are well positioned to offer the sort of bespoke products that are currently in demand,” Nish Popat, head of Fixed Income at ING Investment Management (ING IM) Middle East said. As the changes wrought by the global economic and financial crisis act as a catalyst to awaken demand for fixed income assets in the Middle East, the Dubai-based ING IM Middle East said the company is in a positioned to capitalize on the future growth of this previously neglected asset class. Describing the development of the market, Popat said: “Regional fixed income has historically been a challenging environment.” “We now believe the time and depth of the market has changed to a point where Fixed Income funds will be at the forefront of institutional demand,” he added. The expected growth of the GCC fixed income market, currently a fraction of the size of the fixed income markets of other global regions, is being driven by a number of factors. An improvement in understanding about fixed income among Middle East investors, who previously neglected the asset class for riskier and more profitable assets, is increasing allocation among investors' portfolios. Also, as a consequence of the financial crisis, good quality high yielding paper is available to investors focusing on capital preservation. “The fact that fixed income assets guarantee a coupon, or interest bearing element, and the return of the original investment, as long as the bond does not default, as well as the more stable liquidity of the market, makes this asset class increasingly attractive to investors seeking exposure to a relatively more secure investment opportunity,” Popat added. Popat is confident that ING IM's global expertise in Fixed Income and international standards in transparency, capability in assessing risk and its global distribution network will attract institutional investors as well as private mandates. Meanwhile, governments such as Abu Dhabi and Qatar are generating momentum in the GCC fixed income market by issuing bonds that can act as a yield curve, or benchmark price structure, that corporates in the region can follow when issuing their own bonds. __
