MENA Daily Fixed Income Report - 5 March

Transcription

1. MENA Daily Fixed Income Report – 5 March 2020 Kuwait Financial Centre “Markaz” News Updates GCC Sovereign Yields Maturity Yield % Abu Dhabi 2027 1.80 Yield ∆ (YTD %) -25.34 Maturity Yield % KSA 2025 1.87 Yield ∆ (YTD %) -20.82 to reach 2.5% from 2.75%, Kuwait News Agency (KUNA) reported on Abu Dhabi 2047 2.83 -12.18 KSA 2029 2.32 -18.08 Wednesday. Overnight repo rate currently stands at 2%, while the one- Bahrain 2024 3.36 -1.19 KSA 2049 3.43 -11.10 week and one-month repo rates are at 2.25% and 2.75%, respectively, as Bahrain 2029 4.64 2.36 Oman 2025 4.11 -1.52 Bahrain 2047 5.91 0.71 Oman 2029 5.35 0.12 Dubai 2023 2.47 -0.82 Oman 2048 6.65 -0.59 Kuwaiti central bank lowers interest rates by 0.25% – The Central Bank Sovereigns of Kuwait (CBK) decided to cut its discount rate by 25 basis points (0.25%) shown by the CBK's website. The move follows a decision by the US Federal Reserve on Tuesday to cut interest rates by 0.5%. Central banks in Dubai 2029 3.03 Sovereigns -3.68 Qatar 2024 1.55 Sovereign Ratings Moody’s S&P Abu Aa2 AA Dhabi Bahrain B2 B+ AA AA Oman Ba1 BB BB+ Qatar Aa3 AA- AA- -28.07 KSA A1 A- A Aa2 NR NR B2 Kuwait 2022 1.31 -33.08 Qatar 2028 1.98 -20.76 interest rates. Kuwait 2027 1.80 -22.79 Qatar 2049 3.01 -14.08 Egypt Source: Bloomberg Bonds and Sukuk Indices 1D ∆ (%) 0.63 remains ‘Stable’, bolstered by a robust economic growth, which will support credit conditions for the country's banks. Kuwait's non-oil GDP growth is S&P MENA Bond and Sukuk Index 2.54 NA 0.27 3.47 predicted to remain strong, levelling up by 0.5% to reach nearly 3% in 2020 Bloomberg Emerging Markets USD Index 4.56 6.28 0.58 2.89 compared to 2.5% last year, the rating agency said in a report on Bloomberg Global Aggregate Index Wednesday. In this regard, VP-Senior credit officer at Moody's, Nitish Interbank Rates (%) to the volatile real-estate sector pose substantial risks to Kuwait's banks, Kuwait has sound credit conditions and strong capital, Moody’s said, expecting the tangible common equity ratio to remain stable at around USD Swap Rates sound liquidity.” Furthermore, problem loans will gradually increase to around 2% of gross loans this year, compared to 1.6% in 2018, due to delinquencies at some banks' foreign subsidiaries. The banking system in 14.5%. 10-year Treasury yield falls below 1% for the first time after Fed slashes rates due to coronavirus – The 10-year Treasury yield broke below 1% for the first time ever in the wake of an emergency rate cut by the Federal Reserve to combat the economic effects of the spreading coronavirus. The yield on the benchmark 10-year Treasury note fell more 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year stocks and rushed into bonds for safety as the spreading virus stoked fears of a prolonged economic slowdown or even a recession. Yield % 0.7697 0.7149 0.8128 0.8957 1.0105 1.2551 2-Year 5-Year 10-Year 30-Year 7.27 0.14 6 Months 05/03/2020 31/12/2019 2.7500 2.9375 1.6500 2.2557 2.3233 2.7000 2.4000 2.3500 1.5393 2.1914 -0.4220 -0.3240 1.2520 1.9121 2.98 12 Months 05/03/2020 31/12/2019 3.0000 3.1875 1.6743 2.3071 2.4500 2.8333 2.6700 2.5333 1.6524 2.2900 -0.3620 -0.2490 1.2456 1.9963 Currencies 1D ∆ (bps) -3.83 -3.79 -3.29 -3.41 -3.66 -5.19 YTD ∆ (%) -56.5 -57.9 -53.0 -50.2 -46.7 -40.0 US Treasuries than 11 basis points to an all-time low of 0.906%. The yield on the 30-year Treasury bond was also at a record low of 1.601%. Investors have fled 0.98 3 Months 05/03/2020 31/12/2019 2.5000 2.7500 1.6343 2.2314 1.9000 2.2500 2.3000 2.2500 1.6393 2.2086 -0.4630 -0.3830 1.3143 1.9084 KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR but these are mitigated by very large loan-loss reserves, robust capital, and Duration (yrs) 7.33 YTD ∆ (%) 3.28 Index Name Bloomberg GCC FI Index Bhojnagarwala, said, “High lending concentration to single borrowers and Yield % 2.81 KWD SAR BHD QAR OMR AED USD 0.3061 3.7526 0.3771 3.6675 0.3850 3.6731 UK Guilts Yield % 0.65 0.75 1.02 1.66 1D ∆ (%) 0.09 0.16 0.36 1.12 Yield % 0.19 0.24 0.37 0.90 1D ∆ (bps) 0.0229 -0.0053 0.0000 0.0300 -0.0026 0.0000 YTD ∆ (%) -0.97 -0.02 0.00 -0.22 0.00 0.00 German Bunds 1D ∆ (%) 0.07 0.08 0.25 0.32 Yield % -0.86 -0.85 -0.67 -0.17 1D ∆ (%) 0.04 0.09 0.13 0.10 B B+ Lebanon Ca CC CC 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 43.750 26.68 Kuwait 44.950 30.05 Dubai 10.930 27.52 Bahrain 180.430 5.36 Qatar 48.260 36.93 KSA 71.690 29.10 Egypt 313.870 16.64 Lebanon 12641.37 574.72 Turkey 297.601 6.19 Iraq 419.230 22.48 Morocco 91.500 11.02 China 43.085 41.49 France 17.290 1.07 Germany 8.340 12.24 Japan 21.820 11.31 UK 18.770 2.52 US 14.000 25.67 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 UAE Investors Service stated that the outlook for the Kuwaiti banking system AA Kuwait Saudi Arabia and the UAE announced similar decisions regarding their Kuwait banking outlook remains stable in 2020 - Moody's – Moody's Fitch