Lebanon’s new government, Dubai’s loan rollover

The formation of a new government in Lebanon has raised investors’ hopes that the dire public finances will be put on a stable footing. But we think that these will be disappointed, causing the recent rally in the country’s bond markets to go into reverse. Meanwhile, reports that Abu Dhabi will roll over $20bn of funding to Dubai are a reminder that, a decade after the emirates’ crisis, its debt problems are not over.