MENA Daily Fixed Income Report - 9 April

Transcription

1. MENA Daily Fixed Income Report – 9 April 2020 Kuwait Financial Centre “Markaz” News Updates Abu Dhabi Sells Bonds as Oil States Bolster Finances - Abu Dhabi launched a $7 billion three-part sale, selling $2 billion of five-year bonds, $2 billion of 10-year debt and $3 billion of 30-year notes. The short tranche was launched with a 220 basis point spread over U.S. Treasuries, the 10year securities will offer a 240 basis points spread and the longer debt will yield 4.1%. The latter is about 30 basis points above the rate on Abu Dhabi’s $4 billion of bonds maturing in 2049. MSCI to Postpone Implementation Date of Kuwait Reclassification MSCI Inc. said it will postpone the implementation of the reclassification of the MSCI Kuwait Indexes to Emerging Markets until the November 2020 Semi-Annual Index Review. While the Kuwaiti equity market remains functional the decision to postpone is related to the impact that the COVID19 pandemic is having on the ability of international institutional investors to fully perform all the preparation work required ahead of the implementation, MSCI said GCC Sovereign Yields Maturity Yield % Abu Dhabi 2027 2.79 Price ∆ (YTD %) -2.91 Abu Dhabi 2047 3.85 Bahrain 2024 Bahrain 2029 Bahrain Dubai Sovereigns Dubai Maturity Yield % KSA 2025 2.93 Price ∆ (YTD %) -3.19 -10.52 KSA 2029 3.28 -3.81 7.10 -12.38 KSA 2049 4.68 -12.58 7.74 -20.75 Oman 2025 7.99 -17.04 2047 8.18 -24.80 Oman 2029 10.50 -30.37 2023 3.83 -4.31 Oman 2048 10.31 -33.66 2029 4.94 Sovereigns -13.34 Qatar 2024 Lebanon Wants Debt Halved, Seeks Billions in First Peek at Plans Lebanon gave the first glimpse of its restructuring plans by setting a goal of halving one of the world’s biggest debt burdens as early as this year and moving to a more flexible exchange rate. The government is discussing a reform plan submitted by the Finance Ministry and drafted by a group of advisers including other ministries and Lazard Ltd. According to the plan the success of the proposed reforms largely depends on the support from the International Monetary Fund. Some highlights from the plan:  Lebanon targets the ratio of debt to GDP steadily declining from its current 176% to 103.1% by 2024 and further to 90.2% by 2027; the budget deficit would narrow from this year’s 7.2% of economic output to 1.3% in 2024.  A gradual change in the currency peg starting in 2021 in which it would weaken to 2,607 per dollar, compared with the decades-old fixed-exchange regime of 1,507.5. It’s ultimately expected reach nearly 3,000 by 2024.  The government plans to eliminate electricity subsidies as soon as power is provided 24 hours per day. Tariffs will increase gradually with the generation supply. Moody’s S&P Abu Aa2 AA Dhabi Bahrain B2u B+ Aa2 AA- AA Ba2 BB- BB Qatar Aa3 AA- AA- -2.73 KSA A1 A-u A Aa2 NR NR B2 2022 1.78 -0.12 Qatar 2028 3.32 -6.00 Kuwait 2027 2.43 -1.17 Qatar 2049 4.08 -9.87 Egypt Source: Bloomberg Bonds and Sukuk Indices Yield % 4.71 1D ∆ (%) -0.25 Duration (yrs) 7.50 YTD ∆ (%) -7.78 NA -0.30 -4.85 Bloomberg Emerging Markets USD Index 7.16 6.58 -0.10 -9.64 Bloomberg Global Aggregate Index 1.23 7.47 0.10 -0.59 Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 09/04/2020 31/12/2019 1.9375 2.7500 1.2329 2.2314 1.7500 2.2500 1.2894 2.2500 1.7593 2.2086 -0.2930 -0.3830 1.3199 1.9084 6 Months 09/04/2020 31/12/2019 2.1875 2.9375 1.2329 2.2557 2.0833 2.7000 1.3583 2.3500 1.7613 2.1914 -0.2320 -0.3240 1.2245 1.9121 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year Yield % 0.6624 0.5025 0.5889 0.6914 0.8015 0.9772 YTD ∆ (%) -62.6 -70.4 -65.9 -61.5 -57.7 -53.3 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 09/04/2020 31/12/2019 2.3750 3.1875 1.2314 2.3071 2.2667 2.8333 1.4759 2.5333 1.3831 2.2900 -0.1220 -0.2490 1.0448 1.9963 Currencies 1D ∆ (bps) -0.91 -0.84 -1.56 -2.04 -2.38 -1.65 KWD SAR BHD QAR OMR AED USD 0.3126 3.7645 0.3793 3.6887 0.3851 3.6732 UK Guilts Yield % 0.24 0.45 0.74 1.35 1D ∆ (%) 0.02 0.11 0.29 0.80 Yield % 0.09 0.19 0.37 0.75 1D ∆ (bps) -0.0514 -0.0027 0.0000 -0.3863 -0.0597 -0.0027 YTD ∆ (%) -2.58 -0.28 -0.41 -0.48 0.00 0.00 German Bunds 1D ∆ (%) 0.11 0.19 0.37 2.38 Yield % -0.64 -0.56 -0.34 0.08 1D ∆ (%) 0.00 0.00 0.00 0.00 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 135 Kuwait 104 Dubai 297 AAA YTD ∆ (%) 308 194 240 Bahrain 451 163 Qatar 141 318 KSA 158 199 Egypt 583 114 Lebanon NA NA Turkey 590 111 Iraq 932 166 Morocco 179 108 China 48 63 France 36 112 Germany 21 177 Japan 36 95 UK 34 88 18 68 US 116 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- Oman Kuwait Index Name Bloomberg GCC FI Index Fitch Kuwait UAE S&P MENA Bond and Sukuk Index Egypt Foreign Reserves See Record Fall as Virus Menaces MarketsEgypt’s net international reserves fell by a record, as global uncertainty stemming from the coronavirus outbreak took its toll on portfolio investments in emerging markets. Reserves dropped to $40.1 billion by end-March from $45.5 billion the previous month. 2.76 Sovereign Ratings