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MENA Daily Fixed Income Report - 13 April

Majed Salah
By Majed Salah
2 years ago
MENA Daily Fixed Income Report - 13 April

Sukuk, Reserves


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  1. MENA Daily Fixed Income Report – 12 April 2021 Kuwait Financial Centre “Markaz” News Updates Dubai Islamic Bank mandates banks for Additional Tier 1 RegS Sukuk – Dubai Islamic Bank mandates Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, and Standard Chartered Bank as joint lead managers and joint bookrunners to arrange a series of fixed income investor calls commencing Monday April 12. A benchmark fixed rate USD Regulation S Additional Tier 1 perpetual non-call six year unrated Sukuk will follow, subject to market conditions. FCA/ICMA stabilization applies. Dubai Islamic Bank is rated A3 by Moody’s and A by Fitch. (Source: Bloomberg) Iraq Says It Now Has More Than $60 Billion of Foreign Reserves – Iraq’s foreign reserves have risen to more than $60 billion, driven by the government’s economic reforms, Prime Minister Mustafa Al-Kadhimi said in a statement. The OPEC member’s reserves fell heavily last year after the coronavirus pandemic caused oil prices to crash and the economy went into recession. The government devalued its currency by about 20% against the dollar in December. Iraq’s reserves stood at about $51 billion in October. (Source: Bloomberg) IMF warns on rising debt risks in virus-hit Middle East, Central Asia – The International Monetary Fund said on Sunday countries in the Middle East and Central Asia need to curb their financing requirements, as a surge in government debt, exacerbated by the pandemic, threatens recovery prospects. The region, which includes around 30 countries from Mauritania to Kazakhstan, saw an economic rebound in the third quarter as countries relaxed measures to contain the new coronavirus. But the outlook remains highly uncertain and recovery paths will diverge depending on the speed of vaccinations, reliance on heavily impacted sectors, such as tourism, and countries’ fiscal policy. “Recovery has started, but recovery has started in an uneven, uncertain way,” Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told Reuters. “The outlook is uncertain because the legacies of the pre-COVID-19 are still there, especially for countries who have high levels of debt.”. The Fund said “early inoculators”, which include the oil-rich Gulf countries, Kazakhstan, and Morocco, will reach 2019 gross domestic product (GDP) levels next year, while recovery to those levels is expected to take one year more for other countries. (Source: Reuters) Powell Says Economy Poised for Stronger Growth, Virus a Risk – Federal Reserve Chair Jerome Powell said the U.S. economy is at an “inflection point” with stronger growth and hiring ahead thanks to rising vaccinations and powerful policy support, but Covid-19 remains a threat. “We feel like we’re at a place where the economy is about to start growing much more quickly and job creation coming in much more quickly,” Powell said. “The outlook has brightened substantially. And that’s the base case. I would say again though, there really are risks out there,” he said. “The principal risk to our economy right now really is that the disease would spread again. It’s going to be smart if people could continue to socially distance and wear masks.” (Source: Bloomberg) GCC Sovereign Yields Sovereigns Maturity Yield % Abu Dhabi 2025 1.00 Price ∆ (YTD %) -1.26 Abu Dhabi 2030 2.11 Abu Dhabi 2050 Bahrain Bahrain Bahrain Dubai Sovereign Ratings Maturity Yield % KSA 2025 1.40 Price ∆ (YTD %) -1.30 Kuwait A1 AA- -4.38 KSA 2030 2.53 -4.29 KSA A1 A-u A 3.28 -9.37 KSA 2050 3.81 -8.74 UAE Aa2 NR AA- 2026 3.36 -1.04 Oman 2025 3.39 2.49 AA AA 5.48 -5.11 Oman 2029 5.14 1.77 Abu Dhabi Aa2 2030 2047 6.91 -9.41 Oman 2048 6.84 -1.17 Qatar Aa3 AA- AA- -1.36 Bahrain B2 B+ B+ Ba3 B+ BB- 2029 2.69 -1.73 Sovereigns Qatar 2025 1.08 Moody’s S&P Fitch AA Kuwait 2022 0.25 -0.69 Qatar 2030 2.21 -4.89 Oman Kuwait 2027 1.58 -3.10 Qatar 2050 3.40 -9.80 Egypt B2 B B+ Lebanon C SD RD Bonds and Sukuk Indices Index Name Bloomberg GCC FI Index Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Jordan B1 B+ BB- 2.79 8.08 -0.01 -2.28 Turkey B2 B+u BB- B3 NR B S&P MENA Bond and Sukuk Index 2.40 NA 0.00 -2.93 Tunisia Bloomberg Emerging Markets USD Index 3.95 6.80 -0.08 -2.86 Morocco Ba1 BB+ BB+ -3.80 US Aaa AA+u AAA UK Aa3 AAu AA- China A1 A+ Bloomberg Global Aggregate Index 1.13 7.42 -0.19 Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 12/4/2021 31/12/2020 1.5000 1.4375 0.7971 0.8175 1.2500 2.2500 1.0623 1.1206 0.3593 0.5125 -0.5440 -0.5450 0.1875 0.2384 USD Swap Rates Yield % 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year 0.2096 0.2828 0.9793 1.3541 1.6837 2.1055 Currencies 1D ∆ (bps) 0.06 0.17 0.31 -0.03 -0.44 -0.84 YTD ∆ (%) 8.9 43.0 127.7 106.9 82.0 50.2 USD KWD SAR BHD QAR OMR AED US Treasuries 2-Year 5-Year 10-Year 30-Year 6 Months 12/4/2021 31/12/2020 1.6875 1.6875 0.8443 0.8700 1.3917 2.5333 1.1528 1.1960 0.4511 0.4908 -0.5220 -0.5260 0.2114 0.2576 0.3020 3.7503 0.3770 3.6417 0.3850 3.6730 Commodities 1D ∆ (bps) 0.0662 0.0000 0.0027 -0.0027 0.0000 0.0000 YTD ∆ (%) 0.41 0.04 0.00 -0.01 0.00 0.00 UK Guilts Yield % 0.16 0.87 1.66 2.32 1D ∆ (%) 0.00 -0.01 0.03 0.18 Yield % 0.03 0.35 0.77 1.30 12 Months 12/4/2021 31/12/2020 2.0000 1.9375 0.9171 0.9413 1.6417 2.6833 1.2890 1.3636 0.5364 0.6538 -0.4970 -0.4990 0.2858 0.3419 USD Gold Silver Copper Nat. Gas Aluminum Crude Oil 1,738.20 25.18 399.55 2.56 2,248.50 62.99 YTD ∆ (%) -8.65 -4.90 13.38 0.27 13.43 21.93 German Bunds 1D ∆ (%) 0.00 -0.06 -0.30 -0.45 Yield % -0.68 -0.71 -0.42 0.24 1D ∆ (%) 0.00 0.00 0.00 0.00 A+ USD 5Yr CDS 12-Apr 2021 31-Dec 2020 Kuwait 48.41 40.69 KSA 66.66 63.77 Abu Dhabi 45.55 36.03 Dubai 93.24 104.06 Qatar 45.72 36.70 Bahrain 185.46 233.58 Oman 275.98 353.60 Iraq 545.27 542.74 Egypt 311.15 330.47 Morocco 88.00 102.56 Turkey 440.70 299.47 US 8.69 11.52 UK 10.64 15.13 China 35.82 26.70 Japan 15.43 14.74 Germany 9.30 9.09 France 17.44 14.42 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.