MENA Daily Fixed Income Report - 27 October

Transcription

1. MENA Daily Fixed Income Report – 27 October 2020 Kuwait Financial Centre “Markaz” News Updates Gulf economies set for steep contractions this year before rebounding – The six-member Gulf Cooperation Council faces a steep economic contraction this year before partially rebounding in 2021, with most countries facing sharper declines than previously estimated, a quarterly Reuters poll showed. Saudi Arabia, the region's largest economy, is expected to face a GDP contraction of 5.1% this year and rebound to 3.1% growth next year and 2.7% growth in 2022. A poll conducted three months ago saw the world's largest oil exporter contracting 5.2% in 2020. The United Arab Emirates, which has seen a surge in new COVID-19 cases in the past month or so, is expected to see GDP decline 6.0% this year, grow 2.7% next year and expand 3.8% in 2022. In July, analysts expected a 5.1% decline in 2020 and 2.6% growth in 2021. "The UAE economy will suffer a deeper contraction this year than we anticipated in May," the Institute of International Finance said in a research note. "Dubai's economy may contract by at least 8%, more than Abu Dhabi, as its large exposure to tourism, aviation, and other services makes it more vulnerable to the effects of the pandemic," the IIF said, adding that output declined 9% in the first half of the year and employment dropped by 10%. Median forecasts for Kuwait expected a 6.3% contraction this year, 2.6% growth next year and 3.3% growth in 2022. Three months ago it was seen shrinking 6.1% in 2020 and expanding 2.5% in 2021. (Source: Zawya) GCC Sovereign Yields Sovereigns Maturity KSA 2025 1.33 Price ∆ (YTD %) 6.28 8.76 KSA 2030 2.07 10.71 KSA A1 A-u A 18.23 KSA 2050 3.31 8.96 UAE Aa2 NR NR -4.15 Oman 2025 5.53 -6.29 AA AA Oman 2029 7.03 -11.22 Abu Dhabi Aa2 9.53 Qatar Aa3 AA- AA- 6.90 -12.68 Oman 2048 8.19 -16.63 2.62 2.57 Qatar 2025 1.02 6.45 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 Abu Dhabi 2025 0.92 Abu Dhabi 2030 1.69 Abu Dhabi 2050 2.78 Bahrain 2026 4.09 Bahrain 2030 5.70 Bahrain 2047 Dubai 2029 Sovereigns Maturity Yield % Kuwait 2022 0.47 1.25 Qatar 2030 1.77 11.49 Kuwait 2027 1.24 5.47 Qatar 2050 2.88 21.44 Bonds and Sukuk Indices Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Bloomberg GCC FI Index 2.71 8.08 0.05 6.10 S&P MENA Bond and Sukuk Index 2.13 NA 0.12 7.76 Bloomberg Emerging Markets USD Index 4.01 6.80 0.02 2.35 Bloomberg Global Aggregate Index 0.91 7.42 0.03 6.31 Index Name Interbank Rates (%) KIBOR SAIBOR BHIBOR Dubai developer Union Properties pays off $19mln of debt – Dubai QATAR real estate developer Union Properties (UPP) has paid off AED 70 million AEIBOR ($19 million) of debt from its largest lender as part of a comprehensive EURIBOR LIBOR 3 Months 27/10/2020 31/12/2019 1.5625 2.7500 0.8475 2.2314 2.2500 2.6667 0.8625 2.2500 0.4736 2.2086 -0.5120 -0.3830 0.2165 1.9084 debt restructuring programme. He added that debt restructuring has helped reduce financing costs by 35 percent for the three-month period USD Swap Rates Yield % ending September 2020 year-on-year. (Source: Zawya) Oil steadies, but outlook gloomy as coronavirus cases, supply grow – Oil prices eked out small gains on Tuesday after recent sharp losses, but sentiment remained subdued as a surge in global coronavirus cases hit prospects for crude demand while supply is rising. Brent crude LCOc1 was up 19 cents, or 0.5%, at $40.65 a barrel by 0324 GMT. U.S. oil CLc1 gained 15 cents, or 0.4%, at $38.71 a barrel. Both contracts fell more than 3% on Monday. A lack of progress on agreeing a U.S. coronavirus relief package added to market gloom, although U.S. House of Representatives Speaker Nancy Pelosi said on Monday she hoped a deal can be reached before the Nov. 3 elections. (Source: Reuters) Sovereign Ratings Price ∆ (YTD %) 4.90 Yield % 1-Year 2-Year 5-Year 7-Year 10-Year 30-Year 0.2140 0.2370 0.4164 0.5949 0.8265 1.2535 12 Months 27/10/2020 31/12/2019 2.1250 3.1875 0.9613 2.3071 2.6833 2.8333 1.2375 2.5333 0.8525 2.2900 -0.4640 -0.2490 0.3366 1.9963 Currencies 1D ∆ (bps) -0.04 -0.01 -0.51 -0.49 -0.40 -0.17 YTD ∆ (%) -87.9 -86.0 -75.9 -66.9 -56.4 -40.1 US Treasuries 2-Year 5-Year 10-Year 30-Year 6 Months 27/10/2020 31/12/2019 1.8125 2.9375 0.8963 2.2557 2.5333 2.7000 0.9750 2.3500 0.7075 2.1914 -0.4960 -0.3240 0.2494 1.9121 KWD SAR BHD QAR OMR AED USD 0.3057 3.7505 0.3771 3.6421 0.3850 3.6731 UK Guilts Yield % 0.15 0.35 0.80 1.59 1D ∆ (%) 0.00 0.02 0.03 0.02 Yield % -0.05 -0.03 0.27 0.85 1D ∆ (bps) -0.0327 0.0107 0.0080 -0.0110 0.0000 0.0000 YTD ∆ (%) -0.85 0.03 0.01 0.00 -0.01 0.00 German Bunds 1D ∆ (%) 0.00 0.00 0.04 -0.09 Yield % -0.78 -0.79 -0.65 -0.17 1D ∆ (%) -0.01 -0.02 0.01 0.21 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 27-Oct 2020 31-Dec 2019 Kuwait 45.16 36.700 KSA 75.48 56.915 Abu Dhabi 43.13 36.090 Dubai 130.42 91.005 Qatar 42.91 36.705 Bahrain 335.00 175.995 Oman 466.07 234.400 Iraq 701.81 383.680 Egypt 408.78 277.420 Morocco 119.98 91.435 Turkey 530.50 282.130 US 14.03 10.810 UK 18.20 16.210 China 36.91 31.205 Japan 15.52 21.042 Germany 9.78 7.080 France 16.03 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.