High chance of default and financial crisis in Bahrain anytime in 2018

Since 1997, Bahrain has been rocked with daily/weekly protests and random bombs.

It has never recovered. 

GCC neighbours have supported Bahrain but now even UAE and Saudi are in a crisis of their own.

Bahrain rating has been in junk for several years now.

From construction companies to restaurants to Govt to retailers to steel companies etc, all have been delaying payments or salaries since 2015 when oil plunged below USD 60. Many have shut down.

Now, Franklin Templeton Funds, one of the leading emerging markets firms for well over 3 decades is forecasting a crisis in Bahrain.

I would agree and would expand that entire GCC will see more crisis (less so in Qatar and Oman) due to low oil prices, several civil wars like Yemen, Libya, Iraq, Syria etc which keep expanding all the time, weak currenies in the region from Russia to Africa to Middle East and Turkey etc causing harm to trade flows besides the radical threat of terror groups and ban on trade, tourism and banking with neighbouring countries of Iran, Qatar, Yemen etc.

Bond price of 2028 USD 7% bond of Bahrain has plunged and is now at USD 87.00 levels.

Bahrain Financial Harbour project never took off and lost them billions. Most bonds issued in Bahrain branches of international banks have been downgraded since 2017.

Bahrain has a population of less than 1.4m. Out of which 5,000 people were deported, which means thousands have been sent back home because official numbers are usually lower.

Last year, under pressure from Saudi and UAE, Bahrain also banned Qatari companies which caused job losses and SME and Qatari company closures. all Qatar Airways and Qatar Shipping, Qatar Insurance, Al Jazeera offices were closed, similar to Saudi and UAE.

Bahrain was also supportive of Iran for decades and there was trade between the two through official and unofficial channels both due to geographical proximity.

In 2015, Bahrain had to pull out Ambassador and shut all trade with Iran. All Iranian ships were also banned. 

Now, the end game is here for Bahrain.

Tick tock….before Bahrain has a major default…..same like other GCC nations.

US investment firm warns of economic crisis in Bahrain

Franklin Templeton Investments cuts its debt holdings in Bahrain, citing the 'very serious' threat of a crisis in the next 12 months'.

Franklin Templeton Investments has cut back its debt holdings in Bahrain, citing the “very serious” threat that the cash-strapped nation will experience an economic crisis in the next 12 months if financial aid from neighbors doesn’t come through.

Reference: 

S&P cuts Bahrain rating to 'B+'

7% Kingdom of Bahrain (2028)

5,000 Expats in Bahrain Deported in The Past Three Years