A year ago, bond investors regarded Abu Dhabi and Qatar as miniature versions of Switzerland on the Arabian Gulf - havens for investors amid turbulent financial markets.
But this year, bond investors scouring the world for better returns are turning to Dubai as so-called "safe assets" lose their lustre and generate returns below prevailing rates of inflation.
Last year brought double-digit returns for many Middle Eastern fixed-income assets and record levels of issuance as global investors reassessed the creditworthiness of government-backed bonds in the Arabian Gulf.
Bond sales totalled US$42.7 billion (Dh156.84bn) last year, while the HSBC/Nasdaq Dubai GCC US Dollar Sukuk Index returned 10.3 per cent.
Bankers are now calling an end to the rally.
The re-evaluation of Gulf debts has ended, and investors were being forced to work harder and search for yield, said Philippe Boutron, the regional chief investment officer for Société Générale Private Banking. "In the past, when you invested in the good names in this region - Qatari names, UAE names, Saudi - that had implicit or explicit backing from a state," he said. "We think there's value in fixed income in this region but not in traditional bonds."
Many fixed-income assets have seen yields fall because of a tide of liquidity unleashed by crisis-era bond buying programmes by the United States and Japanese central banks and by the European Central Bank.
"Because this region is under the monetary policy of the Federal Reserve, we're back to zero interest rate policy, which is distorting all assets, including fixed income," said Mr Boutron.
In Qatar's case, a recent acceleration in domestic inflation rates have led to negative yields in real terms for investors of government sovereign debts.
Investors were looking for a "cushion" of higher yields to protect them against a rise in inflation as the global economy recovered, said David Hauner, a Merrill Lynch regional executive.
"Qatar offers so little spread over US treasuries that it's very hard to make money if you think the Treasury yields are going higher. We're more cautious on these very safe bonds at the moment," he said.
Merrill Lynch prefers the Dubai Government's bonds, and some of its government-related entities because of the higher spreads over US treasuries and improving fundamentals.
Dubai's Government issued a 10-year sukuk last month, with sufficient demand to borrow at a lower rate of return than Italy. Bond yields move in the opposite direction from price.
Other banks, including Coutts, have warned clients that emerging market bonds and sukuk could be in the midst of a bubble inflated by US monetary policies and are recommending a switch to stocks.