MENA Daily Fixed Income Report - 10 November

Transcription

1. MENA Daily Fixed Income Report – 10 November 2020 Kuwait Financial Centre “Markaz” News Updates GCC Sovereign Yields Saudi Arabia Outlook Cut to Negative by Fitch on Oil, Virus – Saudi Sovereigns Maturity Yield % Arabia’s outlook was cut to negative from stable by Fitch Ratings as the Abu Dhabi 2025 0.86 coronavirus pandemic and lower oil prices clobber the kingdom’s Abu Dhabi 2030 1.57 finances. A negative outlook means the next move on the credit rating Abu Dhabi 2050 2.69 may be a downgrade to the lowest level since Fitch began assessing the Bahrain 2026 3.62 kingdom in 2004. The sovereign is still at A, its sixth highest rating, and on Bahrain 2030 5.20 par with Japan and Iceland, according to a statement on Monday. Fitch Bahrain 2047 6.42 last downgraded Saudi Arabia in 2019 and has its assessment one notch Dubai 2029 2.45 above S&P Global Ratings and one level lower than Moody’s Investors Kuwait 2022 0.42 Service. The revision for Saudi Arabia “reflects the continued weakening Kuwait 2027 1.21 of its fiscal and external balance sheets” that’s been “accelerated by the coronavirus pandemic and lower oil prices, despite the government’s Bonds and Sukuk Indices strong commitment to fiscal consolidation,” said Fitch analysts including Index Name Bloomberg GCC FI Index Krisjanis Krustins. (Source: Bloomberg) Oman Seeks to Raise Billions by Leveraging Biggest Oil Block – Oman is seeking to raise money off the back of its largest oil block, as the cash-strapped Gulf nation looks for new ways to tame its budget deficit and steady a reeling economy. The sultanate plans to transfer its 60% stake in Block 6, which has a production capacity of 650,000 barrels a day, from Petroleum Development Oman to a new company, according to three people familiar with the matter. The company would then tap international financial markets, allowing Oman to raise debt without putting it on the government’s books, they said, asking not to be identified because they’re not authorized to speak to media. The new firm may try to sell around $3 billion of bonds in the first half of next year, one of the people said. JPMorgan Chase & Co. is advising the government, the person said. PDO and JPMorgan declined to comment. Spokespeople for Oman’s ministries of energy and finance didn’t immediately respond to emails requesting comment. (Source: Bloomberg) Egypt’s Central Bank May Cut Rates to Slow Pound Gains: MUFG – At the same time, with real policy rates at more than 5%, “modest” easing is unlikely to disrupt portfolio inflows into Egypt, Ehsan Khoman, MUFG Bank’s head of Middle Eastern research, writes in a report. CBE will probably lower the deposit rate by 50bps to 8.25% and the lending rate by the same amount to 9.25% at its meeting on Thursday. A rate cut will reduce the upward pressure on the Egyptian pound, easing concerns over the nation’s external competitiveness, Dubai-based Khoman says. It will also support the nation’s near-term growth outlook and public finances (Source: Bloomberg) Sovereign Ratings Price ∆ (YTD %) 5.16 KSA 2025 1.26 Price ∆ (YTD %) 6.60 Sovereigns Maturity Yield % 2030 2.07 10.52 KSA A1 A-u A 2050 3.22 10.65 UAE Aa2 NR NR Abu Dhabi Aa2 AA AA Qatar Aa3 AA- AA- 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 -2.14 Oman 2025 4.96 -4.23 13.31 Oman 2029 6.31 -6.86 -7.49 Oman 2048 7.56 -10.29 3.74 Qatar 2025 0.99 6.51 1.23 Qatar 2030 1.71 12.02 5.62 Qatar 2050 2.78 23.37 2.60 8.08 0.20 7.20 S&P MENA Bond and Sukuk Index 2.08 NA 0.06 8.40 Bloomberg Emerging Markets USD Index 3.85 6.80 0.39 3.84 Bloomberg Global Aggregate Index 0.93 7.42 -0.70 6.45 Interbank Rates (%) 6 Months 10/11/2020 31/12/2019 1.6875 2.9375 0.8913 2.2557 2.5333 2.7000 1.0204 2.3500 0.6981 2.1914 -0.5120 -0.3240 0.2434 1.9121 USD Swap Rates 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year 2-Year 5-Year 10-Year 30-Year 12 Months 10/11/2020 31/12/2019 1.9375 3.1875 0.9550 2.3071 2.6833 2.8333 1.2401 2.5333 0.8022 2.2900 -0.4830 -0.2490 0.3334 1.9963 Currencies YTD ∆ (%) -88.2 -85.2 -72.2 -62.2 -51.3 -36.1 US Treasuries KWD SAR BHD QAR OMR AED USD 0.3057 3.7506 0.3771 3.6420 0.3850 3.6730 UK Guilts Yield % 0.17 0.43 0.91 1.68 1D ∆ (%) 0.01 0.00 0.10 0.66 AA KSA YTD ∆ (%) 1D ∆ (bps) -0.01 0.04 -0.23 -0.65 -1.22 -3.39 Fitch KSA 1D ∆ (%) Yield % 0.2092 0.2505 0.4813 0.6796 0.9223 1.3364 AA- 9.81 Duration (yrs) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR A1 20.26 Yield % 3 Months 10/11/2020 31/12/2019 1.4375 2.7500 0.8413 2.2314 2.2500 2.6667 0.8957 2.2500 0.4836 2.2086 -0.5130 -0.3830 0.2059 1.9084 Moody’s S&P Kuwait Yield % -0.02 0.02 0.37 0.96 1D ∆ (bps) -0.0982 0.0080 0.0027 -0.0192 0.0000 0.0000 YTD ∆ (%) -0.83 0.03 0.00 0.00 -0.01 0.00 German Bunds 1D ∆ (%) -0.05 -0.26 -1.21 -2.63 Yield % -0.73 -0.75 -0.58 -0.08 1D ∆ (%) -0.06 -0.31 -1.01 -3.99 B Morocco Ba1 BBB- BB+ US Aaa AA+u AAA UK Aa2 AAu AA- China A1 A+ A+ USD 5Yr CDS 10-Nov 2020 31-Dec 2019 Kuwait 43.17 36.700 KSA 61.73 56.915 Abu Dhabi 34.18 36.090 Dubai 111.49 91.005 Qatar 34.58 36.705 Bahrain 308.79 175.995 Oman 407.86 234.400 Iraq 580.07 383.680 Egypt 386.61 277.420 Morocco 106.25 91.435 Turkey 459.30 282.130 US 12.74 10.810 UK 18.51 16.210 China 28.12 31.205 Japan 15.20 21.042 Germany 9.64 7.080 France 15.71 16.130 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.