MENA Daily Fixed Income Report - 13 January

Transcription

1. MENA Daily Fixed Income Report – 13 January 2021 Kuwait Financial Centre “Markaz” News Updates GCC Sovereign Yields Cash-Strapped Oman Eyes Dollar-Bond Sale as Debt Burden Mounts Sovereigns Maturity Yield % – Oman, one of the weakest sovereigns in the Gulf Arab region, is 2025 0.87 returning to the dollar-debt market for the first time in less than two Abu Dhabi Abu Dhabi 2030 1.68 months to plug a fiscal gap made worse by oil-price swings and the Abu Dhabi 2050 2.95 pandemic. The cash-strapped sultanate has picked a mix of international Bahrain 2026 3.36 and local banks to arrange global investor calls starting Tuesday for a Bahrain 2030 5.00 benchmark bond sale, according to a person familiar with the matter, who Bahrain 2047 6.24 asked not to be identified because the matter is private. If the sale goes 2029 2.55 through, Oman will be the first sovereign from the Middle East to raise Dubai debt this year. The sultanate plans to issue 10-year and 30-year bonds Kuwait 2022 0.33 and re-open notes due 2025, the person said. The largest oil exporter Kuwait 2027 1.22 outside of OPEC may need to borrow about $4.2 billion to cover a fiscal Bonds and Sukuk Indices shortfall this year. Oman is also reducing spending and plans to impose a Index Name 5% value-added tax in 2021. (Source: Bloomberg) Sukuk Sales May Increase to $155 Billion in 2021, S&P Says – Sales of Islamic bonds may increase this year to as much as $155 billion, as issuance recovers in Malaysia, Indonesia and Gulf Arab countries, with low interest rates and abundant liquidity worldwide, according to S&P Global Ratings. Overall sukuk issuance fell to $139.8 billion in 2020 from $167.3 billion a year earlier, even as securities denominated in foreign currencies increased. About $65 billion of sukuk will mature in 2021, and part of it is likely to be refinanced on the market. The number of defaults or restructuring deals among sukuk issuers with low credit quality may also increase in 2021 as regulatory forbearance measures come to an end; S&P sees pressure on real-estate developers in particular, given the slump in property prices in the GCC and building risks in the commercial sector. “This will test the robustness of the legal documents used for sukuk issuances,” analysts led by Dubai-based Mohamed Damak wrote in a report. (Source: Bloomberg) Two Fed Officials Push Back on Talking Bond Taper Any Time Soon – Don’t discuss reducing the amount of monetary-policy support for the U.S. economy while the pandemic is still raging, said two Federal Reserve officials after some of their colleagues mooted a debate later this year. “We want to get through the pandemic and sort of see where the dust settles, then we will be able to think about where to go with balance-sheet policy,” Federal Reserve Bank of St. Louis President James Bullard said Tuesday during an online interview with the Wall Street Journal. Noting that the outlook will hinge on the successful rollout of Covid-19 vaccines and the path of the virus, Bullard said “we are going to have to see how all of that proceeds here going forward. Then we will be in a position to make a judgment.” Bullard is not a voter this year on the rate-setting Federal Open Market Committee. (Source: Bloomberg) Sovereign Ratings Price ∆ (YTD %) -0.47 KSA 2025 1.19 Price ∆ (YTD %) -0.16 -0.82 KSA 2030 2.20 -1.39 KSA A1 A-u A -3.82 KSA 2050 3.56 -4.85 UAE Aa2 NR AA- -0.30 Oman 2025 4.21 -0.40 AA AA Oman 2029 5.61 -1.40 Abu Dhabi Aa2 -1.70 Qatar Aa3 AA- AA- -1.56 Oman 2048 7.05 -3.74 -0.11 Qatar 2025 0.93 -0.33 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 Sovereigns Maturity Yield % -0.30 Qatar 2030 1.72 -0.75 -0.75 Qatar 2050 3.05 -3.93 Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Bloomberg GCC FI Index 2.54 8.08 -0.42 -1.14 S&P MENA Bond and Sukuk Index 1.70 NA -0.40 -1.26 Bloomberg Emerging Markets USD Index 3.67 6.80 -0.37 -1.38 Bloomberg Global Aggregate Index 0.90 7.42 -0.01 -0.97 Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 13/1/2021 31/12/2020 1.4375 1.4375 0.8175 0.8175 2.2333 2.2500 0.8547 1.1206 0.4365 0.5125 -0.5450 -0.5450 0.2245 0.2384 6 Months 13/1/2021 31/12/2020 1.6875 1.6875 0.8675 0.8700 2.5000 2.5333 0.9874 1.1960 0.5701 0.4908 -0.5230 -0.5260 0.2503 0.2576 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year Yield % 0.2038 0.2214 0.5689 0.8420 1.1319 1.6170 Currencies 1D ∆ (bps) -0.12 -0.25 -0.66 -0.63 -0.68 -0.34 YTD ∆ (%) 5.9 11.9 32.3 28.6 22.3 15.3 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 13/1/2021 31/12/2020 1.9375 1.9375 0.9400 0.9413 2.6667 2.6833 1.1770 1.3636 0.5675 0.6538 -0.5030 -0.4990 0.3269 0.3419 KWD SAR BHD QAR OMR AED USD 0.3030 3.7519 0.3770 3.6421 0.3850 3.6730 UK Guilts Yield % 0.14 0.49 1.12 1.87 1D ∆ (%) 0.00 0.04 0.09 0.12 Yield % -0.09 0.01 0.35 0.93 1D ∆ (bps) 0.1320 -0.0027 0.0000 0.0055 0.0000 0.0000 YTD ∆ (%) 0.10 0.00 0.01 0.00 0.00 0.00 German Bunds 1D ∆ (%) -0.07 -0.20 -0.53 -0.63 Yield % -0.66 -0.72 -0.56 -0.07 1D ∆ (%) -0.01 -0.09 -0.27 -0.77 Moody’s S&P Kuwait A1 AA- Fitch AA B Morocco Ba1 BBB- BB+ US Aaa AA+u AAA UK Aa2 AAu AA- China A1 A+ A+ USD 5Yr CDS 13-Jan 2021 31-Dec 2020 Kuwait 41.68 40.69 KSA 66.24 63.77 Abu Dhabi 42.30 36.03 Dubai 98.02 104.06 Qatar 42.23 36.70 Bahrain 221.15 233.58 Oman 341.77 353.60 Iraq 576.68 542.74 Egypt 310.94 330.47 Morocco 100.51 102.56 Turkey 327.70 299.47 US 11.11 11.52 UK 15.58 15.13 China 29.65 26.70 Japan 14.18 14.74 Germany 9.63 9.09 France 14.65 14.42 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.