Dubai — US firm 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 neighbours doesn’t come through. Templeton’s exposure is "much reduced today" because the government seems to lack a credible reform plan, according to Mohieddine Kronfol, the firm’s chief investment officer for global sukuk and Middle East and North Africa fixed income. At the same time, he is holding onto a small stake in the nation’s bonds, in case Bahrain gets support from its Gulf Arab allies. The island kingdom has lagged behind other Gulf nations such as Saudi Arabia in implementing reforms after the oil-price slide that began in 2014. Despite a rebound in crude this year, Bahrain’s dollar-denominated bonds have taken a battering, with bonds maturing in 2029 falling to a record this week. Traders are the most bearish on the dinar in more than five ...

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