Bahrain has withdrawn $30 million from Pakistan's domestic bond market within the first ten days of fiscal year 2027, a move attributed to the ongoing military conflict in the Gulf region.
The withdrawal signals a rapid reallocation of capital away from emerging market debt as geopolitical risks intensify.
The outflow from Bahrain is part of a broader trend of capital flight triggered by the escalation of hostilities.
Global bond markets have experienced a sharp selloff following the sudden intensification of conflict, prompting investors to shift capital toward traditionally stable safe-haven assets.
This flight to safety is pressuring emerging market currencies and sovereign debt yields as risk appetite evaporates.
Regional equity markets have also reflected the growing uncertainty.