MENA Daily Fixed Income Report - 25 January

Transcription

1. MENA Daily Fixed Income Report – 25 January 2021 Kuwait Financial Centre “Markaz” News Updates Saudi crown prince says PIF will invest $266bln in local economy – Saudi Arabia’s Public Investment Fund (PIF) approved its five-year strategy of investment and job creation on Sunday, as part of its economic transformation. The fund will invest $266bln in the local economy in the next five years through 13 strategic sectors. In addition, it will double its asset volume by more than 4 trillion riyals by 2025 to reach 7.5 trillion riyals by 2030. PIF also aims to invest 2 trillion riyals in new projects from 2026 to 2030 for a cumulative 3 trillion riyals investment in new projects over the next 10 years, Crown Prince Mohammed bin Salman said in a video on the sovereign wealth fund’s website. It will also create 1.8 million direct and indirect new jobs in the next five years “as an engine for economic diversification and job creation.” PIF will continue to work with the private sector and uncover investment opportunities. “We aim to increase local content in PIF projects and its portfolio companies to 60 percent in the next five years,” Prince Mohammed said. The PIF, which was reconstituted in 2015 with the crown price as the chair, aims to become one of the world’s largest sovereign wealth funds by 2030 with assets exceeding 7.5 trillion riyals. (Source: Zawya) UAE cabinet approves debt strategy to build local currency bond market – The United Arab Emirates cabinet approved a public debt strategy aimed at developing the Gulf state’s market for local currency bonds, the UAE’s vice president said in a tweet on Sunday. “The goal is to build a bond market in the local currency ... and stimulate the country’s financial and banking sector,” UAE Vice President and the ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum said. Individual emirates such as Dubai, Abu Dhabi, and Sharjah, have already become issuers of international debt. The UAE has no debt of its own but plans to sell federal bonds soon. (Source: Reuters) S&P Global upgrades Walaa Insurance’s rating to A- – S&P Global Ratings has upgraded Walaa Cooperative Insurance Company’s rating from (BBB+) to (A-) and the GCC rating to (gcAAA), with a “Stable” outlook. The key drivers for the upgrade include the successful integration with MetLife AIG ANB Insurance Company without experiencing any capital or earnings volatility, according to a bourse statement on Sunday. Lending further support to the upgrade was that capital adequacy is above AAA level as per S&P model and is likely to be strengthened over the next two years with the proposed rights issue. Moreover, S&P noted that Walaa enjoys exceptional liquidity, very strong financial risk profile, capital, and earnings with a moderate risk profile. The stable outlook captures S&P’s expectation that Walaa will maintain its robust capital adequacy while strengthening its competitive position and diversifying its operations. (Source: Mubasher) GCC Sovereign Yields Sovereign Ratings Abu Dhabi 2025 0.81 Price ∆ (YTD %) -0.24 Abu Dhabi 2030 1.69 Abu Dhabi 2050 2.85 Bahrain 2026 Bahrain 2030 Bahrain Dubai Sovereigns KSA 2025 1.17 Price ∆ (YTD %) -0.06 -0.92 KSA 2030 2.20 -1.47 KSA A1 A-u A -1.83 KSA 2050 3.44 -2.93 UAE Aa2 NR AA- 3.36 -0.53 Oman 2025 3.80 1.35 AA AA -2.41 Oman 2029 5.45 -0.35 Abu Dhabi Aa2 5.10 Qatar Aa3 AA- AA- 2047 6.36 -3.26 Oman 2048 6.91 -1.97 2029 2.50 0.31 Qatar 2025 0.88 -0.26 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 0.27 -0.33 Qatar 2030 1.75 -1.06 Kuwait 2027 1.25 -0.88 Qatar 2050 2.95 -2.10 Bonds and Sukuk Indices Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Bloomberg GCC FI Index 2.53 8.08 0.01 -0.54 S&P MENA Bond and Sukuk Index 1.65 NA 0.04 -0.67 Bloomberg Emerging Markets USD Index 3.61 6.80 0.00 -0.94 Bloomberg Global Aggregate Index 0.88 7.42 -0.05 -0.71 Index Name Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 25/1/2021 31/12/2020 1.4375 1.4375 0.8175 0.8175 2.2333 2.2500 1.1268 1.1206 0.3463 0.5125 -0.5400 -0.5450 0.2153 0.2384 6 Months 25/1/2021 31/12/2020 1.6875 1.6875 0.8675 0.8700 2.5167 2.5333 1.2011 1.1960 0.4650 0.4908 -0.5250 -0.5260 0.2360 0.2576 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year Yield % 0.1921 0.2010 0.5317 0.8125 1.1203 1.6140 Currencies 1D ∆ (bps) 0.00 0.02 0.48 0.62 0.74 0.83 YTD ∆ (%) -0.2 1.6 23.7 24.1 21.1 15.1 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 25/1/2021 31/12/2020 1.9375 1.9375 0.9388 0.9413 2.6833 2.6833 1.3499 1.3636 0.5000 0.6538 -0.4980 -0.4990 0.3123 0.3419 KWD SAR BHD QAR OMR AED USD 0.3028 3.7513 0.3770 3.6413 0.3850 3.6731 UK Guilts Yield % 0.12 0.44 1.10 1.86 1D ∆ (%) 0.00 -0.03 -0.08 -0.20 Yield % -0.14 -0.04 0.30 0.89 1D ∆ (bps) 0.0496 0.0027 0.0000 -0.0027 0.0000 0.0000 YTD ∆ (%) 0.18 0.01 0.00 0.00 0.00 0.00 German Bunds 1D ∆ (%) 0.01 0.07 0.24 0.52 Yield % -0.67 -0.75 -0.60 -0.10 1D ∆ (%) 0.00 0.00 0.00 0.00 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 25-Jan 2021 31-Dec 2020 Kuwait 41.69 40.69 KSA 67.89 63.77 Abu Dhabi 43.21 36.03 Dubai 106.24 104.06 Qatar 43.09 36.70 Bahrain 228.72 233.58 Oman 320.16 353.60 Iraq 552.30 542.74 Egypt 310.00 330.47 Morocco 94.68 102.56 Turkey 327.27 299.47 US 10.63 11.52 UK 15.39 15.13 China 29.74 26.70 Japan 13.59 14.74 Germany 9.37 9.09 France 14.07 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.