Mubasher: The GCC nations’ bond sales are expected to nudge down this year, compared to $78 billion notes a year earlier as issuers become more cautious on the back of growing interest rates and market volatility, JPMorgan Chase & Co. said.

If there has been uncertainty either “in rates or in spreads”, the GCC issuers become more careful and price sensitive, Hani Deaibes, JPMorgan’s regional head of debt capital markets, told Bloomberg News.

He added that most of the US bank’s clients have stepped up funding options and will weigh up other alternatives if bonds become “expensive”.

Borrowers from the six-nation Gulf bloc primarily sell dollar-denominated bonds and the expected two further interest rate increases in the US this year will boost costs, the New York-based news agency said.

Moreover, the trade war between the US and China, political turmoil in Europe and declining oil prices are all fanning volatility in financial markets’ that in return will make potential issuers uncomfortable, it added.

Potential bond issuers may turn to bank loans for funding if bond-market volatility raises.

The GCC countries’ syndicated loans hiked 54% to $114.5 billion last year, when foreign and local lenders were flush with liquidity, Bloomberg reported.

On Thursday, JPMorgan, one of the biggest arrangers of Gulf bond deals, said that five GCC countries topped by Saudi Arabia would join JPMorgan Chase & Co.’s emerging-market bond indexes this month.

The inclusion lays the ground for billions of dollars in inflows into the securities, Bloomberg News reported, citing the US lender.