MENA Daily Fixed Income Report - 4 January

Transcription

1. MENA Daily Fixed Income Report – 4 January 2021 Kuwait Financial Centre “Markaz” News Updates GCC Sovereign Yields Oman expects public debt to top $56bn by end-2021 – Oman expects Price ∆ Price ∆ Sovereigns Maturity Yield % Sovereigns Maturity Yield % (YTD %) (YTD %) its public debt to reach around 21.7 billion rials ($56.37 billion) by the end 2025 0.75 0.00 KSA 2025 1.17 0.00 of 2021, with international borrowing making up 76% of total public debt, a Abu Dhabi Abu Dhabi 2030 1.57 0.00 KSA 2030 2.02 0.00 finance ministry document showed. That would mean a rise of about 23% Abu Dhabi 2050 2.74 0.00 KSA 2050 3.26 0.00 since end-2019, when the figure stood at 17.6 billion, according to a Bahrain 2026 3.26 0.00 Oman 2025 4.12 0.00 government bond prospectus. Oman expects a 2021 budget deficit of 2.24 Bahrain 2030 4.76 0.00 Oman 2029 5.41 0.00 billion rials as public spending of 10.88 billion tops revenue of 8.64 billion, Bahrain 2047 6.10 0.00 Oman 2048 6.74 0.00 the finance ministry document showed. To make up the shortfall the Dubai 2029 2.51 0.00 Qatar 2025 0.84 0.00 government aims to raise about 1.6 billion through borrowing and draw Kuwait 2022 0.05 0.00 Qatar 2030 1.62 0.00 600 million from its reserves. Rated below investment grade by all major 2027 1.07 0.00 Qatar 2050 2.83 0.00 credit ratings agencies, Oman has piled on debt at breakneck pace in Kuwait recent years and faces a tough repayment schedule. (Source: Bloomberg) Bonds and Sukuk Indices Oman Plans 2021 Borrowing as Oil Price, Virus Batter Economy – Index Name Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Oman’s government will finance most of its budget shortfall in 2021 by Bloomberg GCC FI Index 2.46 8.08 0.04 0.00 borrowing to plug a fiscal gap battered by a decline in oil prices and the S&P MENA Bond and Sukuk Index 2.00 NA 0.09 9.16 coronavirus pandemic. Oman has taken measures such as reduced Bloomberg Emerging Markets USD Index 3.50 6.80 0.09 0.00 spending and plans to impose a 5% value-added tax in 2021. It will Bloomberg Global Aggregate Index 0.83 7.42 -0.04 0.00 implement developmental projects valued at 371 million rials as part of the effort to redirect resources toward “national priorities,” according to the Interbank Rates (%) 3 Months 6 Months 12 Months Oman News Agency. The sultanate’s economy is estimated to have 4/1/2021 31/12/2020 4/1/2021 31/12/2020 4/1/2021 31/12/2020 shrunk 10% in 2020, according to projections from the International KIBOR 1.4375 1.4375 1.6875 1.6875 1.9375 1.9375 Monetary Fund, among the steepest in the Gulf. Bond spreads in the SAIBOR 0.8175 0.8175 0.8700 0.8700 0.9413 0.9413 nation have increased in 2020 compared to neighbors and “while financial BHIBOR 2.2500 2.2500 2.5333 2.5333 2.6833 2.6833 buffers remain ample in Kuwait, Qatar, Saudi Arabia and the United Arab QATAR 0.9701 1.1206 1.0692 1.1960 1.3127 1.3636 Emirates, they are significantly weaker in Bahrain and Oman,” according AEIBOR 0.4250 0.5125 0.5106 0.4908 0.6185 0.6538 to a report by the fund. The largest oil exporter outside of OPEC, Oman EURIBOR -0.5450 -0.5450 -0.5260 -0.5260 -0.4990 -0.4990 has been hammered by the coronavirus pandemic as well as lower crude LIBOR 0.2384 0.2384 0.2576 0.2576 0.3419 0.3419 prices and has raised the possibility of assistance from its Gulf neighbors. Currencies The country is rated at junk levels by three of the leading rating firms. The USD Swap Rates Yield % 1D ∆ (bps) YTD ∆ (%) USD 1D ∆ (bps) YTD ∆ (%) sovereign has three bonds maturing through 2023. This year, its $1.5 1-Year 0.1928 0.03 0.2 KWD 0.3033 0.0000 0.00 billion issuance matures in June. (Source: Bloomberg) 2-Year 0.1993 0.23 0.8 SAR 3.7517 0.0053 0.01 Oil Climbs Above $49 Before OPEC+ Meeting on Production Levels – Oil rose for a fourth day - aided by a falling dollar -- before the OPEC+ alliance meets to decide whether it can keep lifting output as surging coronavirus infections smother the global energy demand recovery. Futures in New York climbed past $49 a barrel after rising 0.6% last week. The alliance returned 500,000 barrels a day to the market this month and meets on Monday to decide on production levels for February. The outlook for the first half is very mixed and there are still many downside risks to juggle, OPEC Secretary-General Mohammad Barkindo said at a meeting on Sunday. (Source: Bloomberg) 5-Year 7-Year 10-Year 30-Year 0.4408 0.6697 0.9434 1.4204 1.17 1.52 1.81 1.84 2.5 2.3 2.0 1.3 US Treasuries 2-Year 5-Year 10-Year 30-Year BHD QAR OMR AED 0.3771 3.6414 0.3850 3.6730 UK Guilts Yield % 0.12 0.37 0.94 1.68 1D ∆ (%) -0.01 -0.07 -0.23 -0.67 Yield % -0.19 -0.10 0.19 0.74 0.0000 0.0055 0.0000 0.0000 0.00 0.00 0.00 0.00 German Bunds 1D ∆ (%) 0.00 0.06 0.18 0.69 Yield % -0.76 -0.76 -0.63 -0.17 1D ∆ (%) 0.00 0.00 0.00 0.00 Sovereign Ratings Moody’s S&P Kuwait Fitch A1 AA- AA KSA A1 A-u A UAE Aa2 NR AA- Abu Dhabi Aa2 AA AA Qatar Aa3 AA- AA- Bahrain B2 B+ B+ Oman Ba3 B+ BB- Egypt B2 B B+ Lebanon C SD RD Jordan B1 B+ BB- Turkey B2 B+u BB- Tunisia B2 NR B Morocco Ba1 BBB- BB+ US Aaa AA+u AAA UK Aa2 AAu AA- China A1 A+ A+ USD 5Yr CDS 4-Jan 2021 31-Dec 2019 Kuwait 40.70 36.700 KSA 63.31 56.915 Abu Dhabi 36.39 36.090 Dubai 103.84 91.005 Qatar 37.06 36.705 Bahrain 226.03 175.995 Oman 343.42 234.400 Iraq 540.12 383.680 Egypt 323.83 277.420 Morocco 102.98 91.435 Turkey 298.81 282.130 US 11.57 10.810 UK 15.30 16.210 China 27.01 31.205 Japan 14.58 21.042 Germany 9.10 7.080 France 14.23 16.130 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.