MENA Daily Fixed Income Report - 17 November

Transcription

1. MENA Daily Fixed Income Report Kuwait Financial Centre “Markaz” News Update – 17 November 2019 Kuwait Q2 GDP declines 1.2% quarter on quarter – Kuwait's gross domestic product fell 1.2% in the second quarter from the previous quarter, the government said in a statement on Sunday. The Gulf state's GDP totalled 9.7 billion dinars ($31.95 billion) at the end of the second quarter. The oil sector accounted for 53.7% of GDP during the period, down from 54.1% the same period a year earlier, the statement said. Dubai Islamic Bank set to raise $750mln in 5-year sukuk – Dubai Islamic Bank, the largest Islamic bank in the United Arab Emirates, is set to raise $750 million via a 5-year sukuk, or Islamic bonds, a document showed on Thursday. The transaction received orders of around $2 billion, including $433 million from the banks working on the deal, according to the document. The sukuk offer investors 140 basis points over midswaps, according to the document. Saudi non-oil GDP forecast to rise 3% in 2019, 2020: IIF – Saudi Arabia’s non-oil growth is expected to accelerate to 3% percent in 2019 and 2020, as private sector confidence improves and the monetary stance eases, the Institute of International Finance (IIF) said in a recent report. The PMI rose to 57.8 in October - the highest in three years - and point of sale transactions continue to expand, the report added. Separately, banks remain adequately capitalized, liquid assets to total assets have increased and the loan-to-deposit ratio remains well below SAMA’s regulatory limit of 90%, the IIF said. Furthermore, banks’ profitability in the Kingdom remains “less sensitive to changes in policy rates”, and non-performing loans (NPLs) are low at around 2% of total loans, it noted. Egypt's central bank makes third straight cut to interest rates – Egypt's central bank cut its key interest rates on Thursday for the third consecutive time, after inflation fell to its lowest in nearly 14 years and central banks continued to ease monetary policy globally. The overnight deposit and lending rates were cut by 100 basis points to 12.25% and 13.25% respectively. S&P downgrades Lebanon's credit rating amidst ongoing protests – S&P Global Ratings said on Friday that it lowered Lebanon's long-term and short-term foreign and local currency sovereign credit ratings to 'CCC/C' from 'B-/B', citing rising financial and monetary risks. The outlook on Lebanon is negative, S&P said, specifying that it reflects the risk to Lebanon's creditworthiness from rising financial and monetary pressures tied to recent widespread protests and the resignation of the government. Confidence in the country's governance and its economy is falling, which has led to a reversal in bank deposit inflows, S&P noted, adding that the Lebanese government will need external donor support or a major domestic reform package to continue its general government debt. GCC Sovereign Yields (17 November 2019) Maturity Yield % Abu Dhabi 2027 2.45 Price ∆ (YTD %) 9.04 Maturity Yield % KSA 2025 2.53 Price ∆ (YTD %) 7.85 Abu Dhabi 2047 3.35 18.24 KSA 2029 2.97 11.36 Bahrain 2024 3.63 7.98 KSA 2049 3.93 22.07 Bahrain 2029 4.83 16.48 Oman 2025 4.36 12.76 Bahrain 2047 6.11 21.81 Oman 2029 5.78 1.32 Dubai 2023 2.55 3.91 Oman 2048 7.07 15.61 Sovereigns Dubai 2029 3.21 Sovereigns 9.06 Qatar 2024 2.22 Sovereign Ratings Moody’s S&P Abu Aa2 AA Dhabi Bahrain B2 B+ AA AA Oman Ba1 BB BB+ Qatar Aa3 AA- AA- 4.44 KSA A1 A- A Aa2 NR NR B2 2022 2.01 3.16 Qatar 2028 2.59 9.24 Kuwait 2027 2.38 7.44 Qatar 2049 3.58 21.77 Egypt Source: Bloomberg Bonds and Sukuk Indices (17 November 2019) 1D ∆ (%) -0.01 Duration (yrs) 7.31 YTD ∆ (%) 12.97 S&P MENA Bond and Sukuk Index 3.04 NA -0.02 12.40 Bloomberg Emerging Markets USD Index 5.01 6.25 -0.02 11.14 Bloomberg Global Aggregate Index 1.43 7.30 0.10 6.07 Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 17/11/2019 31/12/2018 2.7500 1.8750 2.2286 1.8988 2.4000 2.4500 2.3500 2.7342 2.1392 1.8310 -0.4040 -0.3290 1.9026 1.6858 6 Months 17/11/2019 31/12/2018 2.9375 2.0625 2.2500 2.0875 2.8367 2.9000 2.4500 2.8868 2.2563 2.0513 -0.3330 -0.2710 1.9185 1.8336 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year Yield % 1.737 1.632 1.607 1.650 1.736 1.915 YTD ∆ (%) -37.0 -38.7 -37.7 -37.1 -36.0 -32.5 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 17/11/2019 31/12/2018 3.1250 2.3750 2.2971 2.2863 2.9167 3.2750 2.7125 3.0468 2.2551 2.5648 -0.2690 -0.1860 1.9610 2.1022 Currencies 1D ∆ (bps) 0.4 0.9 1.4 1.4 1.4 0.8 KWD SAR BHD QAR OMR AED USD 0.3039 3.7503 0.3771 3.6646 0.3855 3.6730 UK Guilts Yield % 1.61 1.65 1.83 2.30 1D ∆ (%) -0.03% -0.08% -0.09% -0.09% Yield % 0.55 0.51 0.73 1.26 1D ∆ (bps) 0.0198 0.0000 0.0000 0.0000 0.0026 0.0000 YTD ∆ (%) -0.07% 0.03% -0.03% -0.23% 0.00% 0.00% German Bunds 1D ∆ (%) -0.09% -0.03% -0.06% 0.03% Yield % -0.40 -0.66 -0.48 0.16 1D ∆ (%) 0.08% -0.05% -0.05% 0.19% B B+ Lebanon Caa2 B- CCC Turkey B1 B+ BB- Tunisia B2 NR Morocco Ba1 BBB- B+ BBB- Jordan B1 B+ China A1 A+ A+ UK Aa2 AA AA USA BB- Aaa AA+ AAA USD YTD ∆ 5-Year CDS (%) Abu Dhabi 40.560 -36.60 Kuwait 39.900 Dubai 114.210 -6.54 Bahrain 201.380 -27.42 Qatar 40.800 -48.09 KSA 64.370 -36.71 Egypt 294.520 -21.01 Lebanon 1846.140 147.12 Turkey 306.649 -14.68 Iraq 338.030 -24.09 Morocco 84.950 -14.18 China 37.781 -42.52 France 17.960 -49.53 Germany 7.700 -36.04 Japan 21.156 -10.02 UK 28.06 -23.32 US 12.42 -31.31 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. BB- Aa2 Kuwait Yield % 3.30 AA Kuwait UAE Index Name Bloomberg GCC FI Index Fitch -35.15