Just like soldiers, investors need to regularly assess various risks and consider retreating from investments to avoid potential losses. Take the case with the sovereign bonds of Bahrain.

Bahrain – an island country sandwiched by Saudi Arabia and Qatar – is  dependent on oil and gas exports, making its economy sensitive to global oil-price swings. A victim of easing oil prices and the pandemic, Bahrain went from a credit rating of A- in 2011 to B+ at present, effectively losing its investment-grade status.

Last February, a major ratings agency revised its outlook on Bahrain’s long-term foreign currency sovereign bonds to negative, citing weak public finances, rising interest burden, and increasing debt-to-GDP ratio – at 121% in 2023. Despite the news, some investors continue to be hopeful,