Investors Return to New-look Middle East, However Trump Causes Some

Historic political shake-up of region motivating investors

Ceasefire expected to take pressure off Israel's finances

Major funds increasing positions in Egypt

Expects resolution of Lebanon's crisis increasing its bonds

(Recasts headline, includes emergency situation Arab summit in paragraph 8)

By Marc Jones and Steven Scheer

LONDON/JERUSALEM, Feb 9 (Reuters) - A historical shake-up of the Middle East is beginning to draw international financiers, warming to the potential customers of relative peace and economic recovery after so much turmoil.

President Donald Trump's proposal that the U.S. take control of Gaza may have thrown a curveball into the mix, but the vulnerable ceasefire in the Israel-Hamas war, Bashar al-Assad's ouster from Syria, a weakened Iran and a new federal government in Lebanon have fed hopes of a reset.

Egypt, the region's most populated country and a crucial negotiator in the current peace talks, wolvesbaneuo.com has actually simply handled its first dollar debt sale in four years. Not too long ago it was facing economic crisis.

Investors have started purchasing up Israel's bonds again, and those of Lebanon, wagering that Beirut can lastly start repairing its intertwined political, financial and monetary crises.

"The last few months have very much improved the area and embeded in play a very different dynamic in a best-case circumstance," Charlie Robertson, a veteran emerging market expert at FIM Partners, said.

The question is whether Trump's prepare for Gaza inflames tensions again, he included.

Trump's call to "clean up out" Gaza and create a "Riviera of the Middle East" in the enclave was met international condemnation.

Reacting to the outcry, Egypt said on Sunday it would host an emergency situation Arab summit on February 27 to discuss what it explained as "major" advancements for Palestinians.

Credit score firm S&P Global has signalled it will remove Israel's downgrade warning if the ceasefire lasts. It acknowledges the complexities, however it is a welcome possibility as Israel prepares its first significant debt sale because the truce was signed.

(UN)PREDICTABILITY

Michael Fertik, a U.S. endeavor capitalist and elearnportal.science CEO of synthetic intelligence company Modelcode.ai, sincansaglik.com said the easing of tensions had actually contributed to his choice to open an Israeli subsidiary.

He is excited to work with proficient regional software programmers, however geopolitics have been an element too.

"With Trump in the White House, no one doubts the United States has Israel ´ s back in a battle," he said, explaining how it offered predictability even if the war re-ignites.

Having mainly remained away when Israel increase costs on the war, bond financiers are also beginning to come back, main bank information shows.

Economy Minister Nir Barkat informed Reuters in an interview last month that he will be seeking a more generous costs plan focusing on "bold economic development."

The snag for stock investors though, is that Israel was among the finest performing markets on the planet in the 18 months after the October 7, 2023 attacks. Since the ceasefire - which has actually accompanied a sizable U.S. tech selloff - it has actually remained in retreat.

"During 2024, I think we learned that the market is not actually afraid of the war however rather the internal political dispute and tensions," said Sabina Levy, head of research study at Leader Capital Markets in Tel Aviv.

And if the ceasefire buckles? "It is sensible to assume an unfavorable reaction."

Some investors have currently responded badly to Trump's surprise Gaza move.

Yerlan Syzdykov, head of emerging markets at Europe's most significant asset manager Amundi, said his firm had actually purchased up Egypt's bonds after the ceasefire deal, but Trump's plan - which visualizes Cairo and Jordan accepting 2 million Palestinian refugees - has actually changed that.

Both nations have actually baulked at Trump's idea but the threat is, Syzdykov explained, that the U.S. president uses Egypt's reliance on bilateral and IMF support to attempt to strong arm the nation offered its current brush with a full-blown economic crisis.

Reducing the attacks by Yemen's Houthi fighters on ships in the Red Sea also remains vital. The country lost $7 billion - more than 60% - of its Suez Canal profits in 2015 as carriers diverted around Africa rather than danger ambush.

"Markets are not likely to like the concept of Egypt losing such (bilateral and multilateral) support, and we are taking a more careful stance to see how these settlements will unfold," Syzdykov said.

REBUILD AND RESTRUCTURE

Others expect the rebuilding of bombed homes and facilities in Syria and in other places to be a chance for Turkey's heavyweight building firms.

Trump's Middle East envoy, Steve Witkoff, has said it could take 10 to 15 years to restore Gaza. The World Bank, meanwhile, puts Lebanon's damage at $8.5 billion, roughly 35% of its GDP.

Beirut's default-stricken bonds more than doubled in price when it ended up being clear in September that Hezbollah's grip in Lebanon was being compromised and have continued to rise on hopes the country's crisis is dealt with.

Lebanon's brand-new President Michel Aoun's very first state check out will be to Saudi Arabia, a country viewed as a potential essential fan, securityholes.science and utahsyardsale.com one that most likely sees this as an opportunity to further get rid of Lebanon from Iran's sphere of influence.

Bondholders say there have been preliminary contacts with the new authorities too.

"Lebanon might be a big story in 2025 if we make progress towards a debt restructuring," Magda Branet, head of emerging markets repaired income at AXA Investment Managers, botdb.win said.

"It is not going to be simple" though she included, pipewiki.org given the country's performance history, the $45 billion of financial obligation that needs reworking which Lebanese savers could see a few of their money seized by the government as part of the strategy.

(Reporting by Marc Jones and Steve Scheer; Editing by and William Mallard)