MENA Daily Fixed Income Report - 21 April

Transcription

1. MENA Daily Fixed Income Report – 21 April 2020 Kuwait Financial Centre “Markaz” News Oil Rebounds From Record Wipeout With Prices Edging Above Zero Oil rebounded in Asian trading, after plunging below zero for the first time in history amid rapidly filling American storage tanks, as the U.S. benchmark’s May contract entered its final trading session. Futures in New York traded at around $1 a barrel after sinking to as low as minus $40.32. The June contract, however, which had trading volumes more than 60 times higher, rose above $21. The spread between the two reflects the growing fear that those who take physical delivery of crude in the near future may not find any outlet or storage for those barrels as refineries curb operations. Bahrain Follows Saudi Arabia, Oman With Budget Cuts Amid Crisis Bahrain announced drastic spending cuts to combat the global pandemic decimate revenue. The Gulf country will slash operating expenses for ministries and government departments by 30%. The cabinet also agreed to reschedule a number of construction and other projects to help meet emergency costs of preventing the spread of the virus. Dana Gas to Use Egypt Sale Funds to Pay Debt If Deal Goes Ahead Dana Gas PJSC plans to use proceeds from the sale of its Egyptian assets to pay the outstanding $397 million of its sukuk maturing in October should the deal go ahead. The Sharjah-based energy producer will use its cash position to make up any shortfall in payments, according to Chief Executive Officer’s address to Tuesday’s shareholders meeting. “In case the sale does not proceed, we are already exploring different mechanisms to raise money to pay the sukuk,” he said. The Fed Is Buying $41 Billion of Assets Daily and It’s Not Alone Central-bank balance sheets are expanding to record levels amid their latest buying spree, raising questions about how big they can get and whether those assets can ever be sold back to markets. Central banks in Group of Seven countries purchased $1.4 trillion of financial assets in March, nearly five times as much as the previous monthly record set in April 2009. Morgan Stanley analysts estimate that the Federal Reserve, European Central Bank, Bank of Japan and Bank of England will expand their balance sheets by a cumulative $6.8 trillion when all is said and done. Argentina's Debt Plan Is Turned Down - Three of the largest groups of Argentine bondholders on Monday rejected the government's proposal to restructure tens of billions of dollars in foreign debt, raising the likelihood that the country could enter into default as early as next month. The nearsimultaneous statements from the committees presents a unified front against the current deal that investors hope will push Argentina to change its terms. GCC Sovereign Yields Maturity Yield % Abu Dhabi 2027 2.46 Price ∆ (YTD %) -0.72 Abu Dhabi 2047 3.62 Bahrain 2024 Bahrain 2029 Bahrain Dubai Sovereigns Dubai Maturity Yield % KSA 2025 2.66 Price ∆ (YTD %) -2.03 -6.88 KSA 2029 3.11 -2.52 6.54 -10.74 KSA 2049 4.45 -9.24 7.35 -18.47 Oman 2025 7.23 -14.05 2047 7.99 -23.09 Oman 2029 10.07 -28.27 2023 3.70 -3.98 Oman 2048 10.12 -32.49 2029 4.47 Sovereigns -10.16 Qatar 2024 2.17 Sovereign Ratings Moody’s S&P Abu Aa2 AA Dhabi Bahrain B2u B+ Aa2 AA- AA Oman Ba2 BB- BB Qatar Aa3 AA- AA- -0.61 KSA A1 A-u A Aa2 NR NR B2 Kuwait 2022 1.59 0.24 Qatar 2028 2.81 -2.71 Kuwait 2027 2.14 0.63 Qatar 2049 3.87 -6.52 Egypt Source: Bloomberg Bonds and Sukuk Indices Yield % 4.32 1D ∆ (%) -0.20 Duration (yrs) 7.50 S&P MENA Bond and Sukuk Index YTD ∆ (%) -5.94 NA 0.03 -3.07 Bloomberg Emerging Markets USD Index 6.61 6.58 -0.06 -7.45 Bloomberg Global Aggregate Index 1.12 7.47 -0.12 0.59 Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 21/04/2020 31/12/2019 1.7500 2.7500 1.2286 2.2314 1.8500 2.2500 1.2467 2.2500 1.5150 2.2086 -0.2430 -0.3830 1.1090 1.9084 6 Months 21/04/2020 31/12/2019 2.0000 2.9375 1.2314 2.2557 2.0667 2.7000 1.2944 2.3500 1.5798 2.1914 -0.1950 -0.3240 1.1025 1.9121 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year Yield % 0.5656 0.4260 0.4660 0.5611 0.6733 0.8315 YTD ∆ (%) -68.1 -74.9 -73.0 -68.8 -64.5 -60.2 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 21/04/2020 31/12/2019 2.2500 3.1875 1.2314 2.3071 2.3000 2.8333 1.3944 2.5333 1.6370 2.2900 -0.1050 -0.2490 0.9819 1.9963 Currencies 1D ∆ (bps) 0.81 0.44 0.53 0.30 0.10 -0.38 KWD SAR BHD QAR OMR AED USD 0.3121 3.7550 0.3783 3.6751 0.3851 3.6732 UK Guilts Yield % 0.20 0.35 0.61 1.21 1D ∆ (%) 0.00 -0.01 0.02 0.32 Yield % 0.08 0.19 0.33 0.71 1D ∆ (bps) -0.0064 -0.0266 0.0185 -0.1991 0.0130 0.0027 YTD ∆ (%) -2.63 -0.04 -0.20 -0.21 -0.02 0.00 German Bunds 1D ∆ (%) 0.00 0.00 0.00 0.00 Yield % -0.70 -0.67 -0.50 -0.06 1D ∆ (%) 0.01 0.05 0.17 0.70 B B+ Lebanon Ca SD RD Turkey B1 B+u BB- Tunisia B2 NR B+ Morocco Ba1 BBBJordan B1 B+ BBBBB- China A1 A+ A+ UK Aa2 AA AA USA Aaa AA+u USD 5-Year CDS Abu Dhabi 118 Kuwait 107 Dubai 275 AAA YTD ∆ (%) 248 200 216 Bahrain 450 163 Qatar 120 249 KSA 158 190 Egypt 614 125 Oman 689 198 Turkey 604 113 Iraq 1117 14 Morocco 177 105 China 40 46 France 39 135 Germany 22 187 Japan 33 80 UK 35 88 US 18 68 129 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. AA BB- Kuwait UAE Index Name Bloomberg GCC FI Index Fitch 280