MENA Daily Fixed Income Report - 11 August

Transcription

1. MENA Daily Fixed Income Report – 11 August 2020 Kuwait Financial Centre “Markaz” 2 News Updates Bahrain’s First-Half Budget Deficit Almost Doubles on Oil, Virus – Bahrain’s budget deficit widened by 98% in the first half of the year from the same period in 2019 as lower oil prices and the coronavirus pandemic cut into revenue, according to Bahrain News Agency. The shortfall reached an estimated 798 million dinars ($2.1 billion), the state-run news service reported, without giving a comparative figure for the previous year. Revenue was down 29%, the agency said, citing a cabinet meeting on Monday. Bahrain, the smallest among economies of the six Gulf Cooperation Council members, is on course to rack up a deficit that the International Monetary Fund projects will be among the world’s 10 biggest this year at 15.7% of gross domestic product. (Source: Bloomberg) Egypt’s Real Rates Are World’s Highest After Inflation Slows – Consumer prices in urban parts of Egypt grew at the slowest annual pace since November as the global pandemic weighed on demand and food costs declined. Defying some analyst expectations for a moderate pickup, inflation eased to 4.2% from a year earlier in July, compared with 5.6% in June, according to data published on Monday by the state-run statistics agency, CAPMAS. The deceleration left the country with the world’s highest interest rates when adjusted for inflation. Annual inflation remains below the lower bound of the central bank’s target range for the end of the year, set at 9% plus or minus 3 percentage points. Still, most economists surveyed by Bloomberg predict the central bank will leave its key deposit rate at 9.25% when its Monetary Policy Committee meets on Aug. 13. Adjusted for prices, Egypt’s policy rate is just over 5%, the highest among more than 50 major economies tracked by Bloomberg. The central bank reduced borrowing costs by a combined 450 basis points last year and another 300 basis points at a March 16 emergency meeting. (Source: Bloomberg) Lebanon’s Bondholders Left in the Lurch as Government Resigns – The resignation of Lebanon’s government after last week’s devastating explosion in Beirut threatens to upend any prospect of a debt restructuring deal in the next few months. Senior officials will continue in a caretaker capacity until a new administration is formed. It’s unclear how long that process will take. The Middle Eastern nation defaulted on about $30 billion of Eurobonds in March. Since then, its talks with the International Monetary Fund for a bailout have stalled. “Bondholders don’t really know who they would be negotiating with,” said Richard Segal, a senior analyst at Manulife Investment Management in London. The largest holders of Lebanon’s Eurobonds include BlackRock Inc., Ashmore Group Plc and Fidelity Investments, according to data compiled by Bloomberg. (Source: Bloomberg) GCC Sovereign Yields Sovereign Ratings Abu Dhabi 2027 1.24 Price ∆ (YTD %) 7.17 Abu Dhabi 2047 2.41 Bahrain 2024 3.59 Bahrain 2029 Bahrain 2047 Dubai Dubai Sovereigns Maturity Yield % Sovereigns Maturity Price ∆ (YTD %) 4.18 Yield % AA 14.59 KSA 2029 1.86 6.53 KSA A1 A-u A -2.09 KSA 2049 2.93 16.35 UAE Aa2 NR NR 5.11 -4.87 Oman 2025 4.59 -2.96 AA AA -7.23 Oman 2029 6.41 -7.48 Abu Dhabi Aa2 6.40 Qatar Aa3 AA- AA- 2023 1.25 1.93 Oman 2048 7.62 -11.03 2029 2.77 1.76 Qatar 2024 0.77 4.03 Bahrain B2u B+ BB- Oman Ba3 BB- BB Egypt B2 B B+ Lebanon C SD RD Jordan B1 B+ BB- Turkey B1 B+u BB- Tunisia B2 NR B BBB- BBB- US Aaa AA+u AAA UK Aa2 AAu AA- China A1 A+ A+ 1.83 Qatar 2028 1.38 6.55 Kuwait 2027 1.16 6.26 Qatar 2049 2.49 18.55 Bonds and Sukuk Indices Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Bloomberg GCC FI Index 2.56 8.18 -0.02 7.55 S&P MENA Bond and Sukuk Index 2.01 NA 0.01 9.36 Bloomberg Emerging Markets USD Index 4.11 6.90 0.13 3.83 Bloomberg Global Aggregate Index 0.82 7.48 0.00 6.21 Index Name Interbank Rates (%) 3 Months 11/08/2020 31/12/2019 1.5625 2.7500 0.9200 2.2314 6 Months 11/08/2020 31/12/2019 1.8125 2.9375 0.9700 2.2557 12 Months 11/08/2020 31/12/2019 2.1250 3.1875 1.0200 2.3071 BHIBOR QATAR 2.2833 1.2250 2.6667 2.2500 2.5167 1.2750 2.7000 2.3500 2.6833 1.4000 2.8333 2.5333 AEIBOR EURIBOR 0.4608 -0.4780 2.2086 -0.3830 0.6996 -0.4180 2.1914 -0.3240 0.9411 -0.3500 2.2900 -0.2490 0.2525 1.9084 0.3091 USD Swap Rates Yield % 0.2373 0.2181 0.3058 0.4337 0.5991 0.8813 1.9121 0.4490 1.9963 Currencies 1D ∆ (bps) 0.02 0.01 0.24 0.41 0.48 0.49 YTD ∆ (%) -86.6 -87.2 -82.3 -75.9 -68.4 -57.9 US Treasuries 2-Year 5-Year 10-Year 30-Year Fitch 1.17 0.35 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year AA- 2025 2022 LIBOR Aa2 KSA Kuwait KIBOR SAIBOR Moody’s S&P Kuwait KWD SAR BHD QAR OMR AED USD 0.3058 3.7502 0.3770 3.6420 0.3850 3.6731 UK Guilts Yield % 0.13 0.24 0.58 1.25 1D ∆ (%) 0.00 0.00 -0.03 0.02 Yield % -0.04 -0.08 0.13 0.68 1D ∆ (bps) -0.0981 0.0000 0.0053 0.0000 0.0000 0.0000 YTD ∆ (%) -0.88 0.04 0.02 0.01 0.00 0.00 German Bunds 1D ∆ (%) 0.01 0.03 0.09 -0.11 Yield % -0.73 -0.75 -0.60 -0.11 1D ∆ (%) 0.03 0.09 0.17 0.39 Morocco Ba1 USD 5Yr CDS 11-Aug 2020 31-Dec 2019 Kuwait 55.550 36.700 KSA 84.570 56.915 Abu Dhabi 48.060 36.090 Dubai 158.560 91.005 Qatar 47.170 36.705 Bahrain 300.690 175.995 Oman 465.760 234.400 Iraq 639.380 383.680 Egypt 438.520 277.420 Morocco 126.860 Turkey 566.360 282.130 US 13.150 10.810 UK 22.050 16.210 China 39.910 31.205 Japan 16.110 21.042 Germany 10.490 7.080 France 16.630 16.130 91.435 Source: Bloomberg This report has been prepared and issued by Kuwait Financial Centre K.P.S.C. (Markaz) , which is regulated by the Capital Markets Authority and the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report can not be published. A number of sources which include Bloomberg, Zawya, and daily newspapers were utilized in the creation of this report.