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Saturday, 10 November 2007

Ratings agencies battle as GCC booms

With economic activity in the Gulf at frenetic levels, international credit ratings agencies are turning their attention to the region - and competition between the main players looks set to heat up.Significantly, Moody's has recently placed a vice president and senior sovereign analyst in Dubai to spearhead the agency's sovereign coverage of the Middle East.Rival agency Standard and Poor's (S&P) is also present in Dubai and is one of the largest providers of ratings in the Middle East, with more than 120 public ratings. The company also offers three equity indexes that track the stocks of Sharia-compliant companies: the S&P 500 Sharia, S&P Europe 350 Sharia, and S&P Japan 500 Sharia. "Moody's has always believed the marketplace benefits from a diversity of opinion. Moreover, we believe the quality of our rating methodologies and strength of our analytical talent is a key competitive differentiator," Frederic Drevon, Head of Moody's Europe, Middle East & Africa told Arabian Business.Moody's currently rates over 80 issuers of debt in the GCC, including governments, financial and corporate institutions as well as structured finance transactions, medium-term note and commercial paper programmes, bonds and sukuk."We have a vibrant pipeline of ratings in the region and we fully expect this will continue into 2008 as local issuers of sukuk and debt recognise the value of ratings in establishing their credibility and easing their access to international capital markets," said Drevon.High oil prices, structural reforms and strong balance sheets have stimulated economic activity across the Gulf. This has spun off a variety of financial instruments made available to investors by companies, banks and governments that can be rated by the credit ratings agencies. - (AB, 10 Nov 07)

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