MENA Daily Fixed Income Report - 18 February

Transcription

1. MENA Daily Fixed Income Report – 18 February 2021 Kuwait Financial Centre “Markaz” News Updates Kuwait’s Central Bank Is Said to Extend Virus Relief Until June – Kuwait’s central bank has extended until the end of June the support measures it introduced last year to help lenders cope with the coronavirus pandemic, according to people familiar with the decision. The amendments will be reviewed by the central bank’s board of directors to decide if another extension is needed beyond June or whether the requirements should revert to their pre-crisis levels, the regulator told lenders in a circular seen by Bloomberg and confirmed by the people. They declined to be identified discussing confidential matters. The program, which unlocks extra liquidity and allows for regulatory flexibility, was originally in effect until end-2020. (Source: Bloomberg) GCC holdings of US Treasuries fall 16.5% in December – Investments of the GCC states in US Treasury bills and bonds decreased by 16.5% or $45.9 billion year-on-year (YoY) during December 2020. Total investments of Gulf countries in US Treasury bills and bonds amounted to $231.414 billion in December 2020, compared to $277.285 billion in the same month in 2019, as shown by official data. Saudi Arabia was the top GCC buyer of US Treasury bonds with $134.4 billion in December 2020. This is down from $179.8 billion in December 2019. Kuwait ranked second, raising its holdings of US debt instruments by 6.47% to $46.1 billion, followed by the UAE, which cut its holdings by $4.4 billion to $36.3 billion. Qatar held the fourth position with higher annual investments in US debt instruments by $2.91 billion last December at $7.99 billion. On the contrary, Oman saw its holdings of US treasury bonds declining by $1.4 billion to $5.7 billion. Bahrain tailed the list with $916 million in holdings during December 2020, compared with $1.27 billion in December 2019. (Source: Mubasher) Turkey to Extend Rate Pause Amid Lira Rally – Turkey’s central bank is expected to hold interest rates for a second month as it waits out an upswing in inflation while the lira rallies. All but three of the 25 economists surveyed by Bloomberg predict borrowing costs will stay steady at 17% on Thursday. The lira has jumped a world-leading 23% against the dollar since President Recep Tayyip Erdogan overhauled his economic policy team in November, installing a market-friendly central bank governor who won over investors with rate hikes, policy simplification and hawkish pledges. Although inflation quickened for a fourth month to 15% in January, on the lingering impact of last year’s lira depreciation and rapid credit growth, most economists say Governor Naci Agbal can get away with keeping the key rate unchanged. Yet while inflation overshoot is now within the central bank’s prediction range, it will accelerate further, forcing an additional policy interest rate hike of 100 basis points by the end of April, Morgan Stanley analysts including Alina Slyusarchuk wrote in an emailed note. Another reason to stand pat is the slowing credit growth. The pace of annual lending expansion has been below inflation over the past two months. The boom in lending has been fizzling out since a decision in November to remove a rule that pressured banks to extend credit. (Source: Bloomberg) GCC Sovereign Yields Sovereign Ratings Abu Dhabi 2025 0.85 Price ∆ (YTD %) -0.48 Abu Dhabi 2030 1.85 Abu Dhabi 2050 3.08 Bahrain 2026 Bahrain 2030 Bahrain Dubai Sovereigns KSA 2025 1.18 Price ∆ (YTD %) -0.22 -2.26 KSA 2030 2.21 -1.73 KSA A1 A-u A -6.05 KSA 2050 3.59 -5.39 UAE Aa2 NR AA- 3.31 -0.45 Oman 2025 3.55 2.08 AA AA -2.26 Oman 2029 5.18 1.52 Abu Dhabi Aa2 5.06 Qatar Aa3 AA- AA- 2047 6.48 -4.62 Oman 2048 6.88 -1.72 2029 2.43 0.39 Qatar 2025 0.88 -0.41 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 Maturity Yield % Sovereigns Maturity Yield % Kuwait 2022 0.49 -0.68 Qatar 2030 1.91 -2.46 Kuwait 2027 1.34 -1.59 Qatar 2050 3.17 -6.02 Bonds and Sukuk Indices Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Bloomberg GCC FI Index 2.56 8.08 -0.13 -1.16 S&P MENA Bond and Sukuk Index 2.14 NA -0.25 -1.62 Bloomberg Emerging Markets USD Index 3.59 6.80 -0.04 -1.12 Bloomberg Global Aggregate Index 0.98 7.42 -0.21 -1.95 Index Name Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 18/2/2021 31/12/2020 1.5000 1.4375 0.8063 0.8175 2.0833 2.2500 0.9405 1.1206 0.3238 0.5125 -0.5430 -0.5450 0.1886 0.2384 6 Months 18/2/2021 31/12/2020 1.7500 1.6875 0.8525 0.8700 2.3500 2.5333 1.0431 1.1960 0.4273 0.4908 -0.5200 -0.5260 0.2026 0.2576 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year Yield % 0.1732 0.1960 0.6751 1.0083 1.3552 1.8433 Currencies 1D ∆ (bps) -0.06 -0.22 0.69 0.70 0.88 1.00 YTD ∆ (%) -10.0 -0.9 57.0 54.0 46.5 31.5 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 18/2/2021 31/12/2020 2.0000 1.9375 0.9263 0.9413 2.6200 2.6833 1.2348 1.3636 0.5640 0.6538 -0.5000 -0.4990 0.3026 0.3419 KWD SAR BHD QAR OMR AED USD 0.3025 3.7508 0.3771 3.6421 0.3850 3.6730 UK Guilts Yield % 0.10 0.55 1.28 2.04 1D ∆ (%) 0.00 -0.02 -0.05 -0.14 Yield % -0.07 0.10 0.57 1.15 1D ∆ (bps) 0.0000 0.0027 -0.0027 0.0055 0.0000 0.0000 YTD ∆ (%) 0.28 0.03 -0.01 0.01 0.01 0.00 German Bunds 1D ∆ (%) 0.01 0.09 0.55 1.58 Yield % -0.66 -0.71 -0.47 0.13 1D ∆ (%) 0.00 0.05 0.20 0.74 Moody’s S&P Kuwait A1 AA- Fitch AA B Morocco Ba1 BBB- BB+ US Aaa AA+u AAA UK Aa3 AAu AA- China A1 A+ A+ USD 5Yr CDS 18-Feb 2021 31-Dec 2020 Kuwait 41.18 40.69 KSA 62.43 63.77 Abu Dhabi 41.25 36.03 Dubai 100.31 104.06 Qatar 41.91 36.70 Bahrain 227.59 233.58 Oman 324.51 353.60 Iraq 506.63 542.74 Egypt 301.38 330.47 Morocco 101.12 102.56 Turkey 290.75 299.47 US 9.69 11.52 UK 13.77 15.13 China 28.05 26.70 Japan 13.91 14.74 Germany 8.85 9.09 France 14.25 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.