MENA Daily Fixed Income Report - 8 December

Transcription

1. MENA Daily Fixed Income Report – 8 December 2020 Kuwait Financial Centre “Markaz” News Updates Kuwait's Burgan Bank plans Tier 2 dollar bonds – Kuwait's Burgan Bank has hired banks to arrange investor calls ahead of a planned issuance of US dollar-denominated Tier 2 bonds, a document issued by one of the banks and reviewed by Reuters showed on Monday. Tier 2 bonds are a form of subordinated debt, ranking ahead of equity but below senior bonds. Burgan - Kuwait's second-largest conventional bank by assets - has hired Citi and Standard Chartered as joint global coordinators. Other banks on the deal are Bank ABC, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, JPMorgan, Kamco Invest, Mizuho Securities, MUFG, and NBK Capital. Burgan Bank is rated A+ by Fitch, A3 by Moody's and BBB+ by S&P. Burgan Bank’s 11NC6 Subordinated RegS Tier 2 USD Notes IPTs are at the 3.250% area. (Source: Business Recorder, Bloomberg) Fitch Rates Burgan Bank's Subordinated Tier 2 Notes 'A-(EXP)' – Fitch Ratings has assigned Burgan Bank K.P.S.C.'s subordinated Tier 2 notes an expected rating of 'A-(EXP)'. The subordinated notes are rated two notches below the bank's Long-Term IDR to reflect their subordinated status and Fitch's view of a high likelihood of poor recoveries in the event of default. Fitch do not notch the notes for incremental non-performance risk because the terms of the notes do not provide for loss absorption on a 'going concern' basis (e.g. coupon omission or write-down/conversion). In Fitch’s opinion, this risk is low given their view of potential sovereign support that could be made available to the bank. (Source: Bloomberg) UAE Eases Oil Supply Cuts to Asia After OPEC+ Compromise Deal – The United Arab Emirates will provide Asian oil buyers with a little more crude next month after OPEC+ reached a compromise deal on cuts. While OPEC’s third-largest producer will still reduce supply to Asia in January, the curbs won’t be as deep as this month in percentage terms. OPEC+ agreed last week to gradually increase supply from January after almost a week of fraught negotiations and heightened tension between Saudi Arabia and the UAE. Under the agreement, the UAE is able to pump an extra 38,000 barrels a day in January, compared with its AugustDecember output. (Source: Bloomberg) GCC Sovereign Yields Sovereigns Sovereign Ratings Price ∆ (YTD %) 5.14 Yield % Abu Dhabi 2025 0.84 Abu Dhabi 2030 1.58 Abu Dhabi 2050 2.69 Bahrain 2026 3.34 Bahrain 2030 4.67 Bahrain 2047 6.11 Dubai 2029 2.59 KSA 2025 1.24 Price ∆ (YTD %) 6.57 9.60 KSA 2030 2.10 10.29 KSA A1 A-u A 20.43 KSA 2050 3.25 10.13 UAE Aa2 NR AA- -1.20 Oman 2025 4.34 -1.87 AA AA Oman 2029 5.46 -1.31 Abu Dhabi Aa2 17.56 Qatar Aa3 AA- AA- -3.78 Oman 2048 6.78 -1.47 2.64 Qatar 2025 0.97 6.46 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 Sovereigns Maturity Yield % Kuwait 2022 0.23 1.33 Qatar 2030 1.70 11.97 Kuwait 2027 1.15 5.83 Qatar 2050 2.77 23.74 Bonds and Sukuk Indices Yield % Duration (yrs) 1D ∆ (%) YTD ∆ (%) Bloomberg GCC FI Index 2.52 8.08 0.10 8.25 S&P MENA Bond and Sukuk Index 1.74 NA 0.03 8.82 Bloomberg Emerging Markets USD Index 3.62 6.80 0.07 5.38 Bloomberg Global Aggregate Index 0.87 7.42 0.14 8.23 Index Name Interbank Rates (%) KIBOR SAIBOR BHIBOR QATAR AEIBOR EURIBOR LIBOR 3 Months 8/12/2020 31/12/2019 1.4375 2.7500 0.8288 2.2314 2.2500 2.6667 1.0806 2.2500 0.3450 2.2086 -0.5320 -0.3830 0.2259 1.9084 6 Months 8/12/2020 31/12/2019 1.6875 2.9375 0.8775 2.2557 2.5333 2.7000 1.1648 2.3500 0.5850 2.1914 -0.5120 -0.3240 0.2558 1.9121 USD Swap Rates 1-Year 2-Year 5-Year 7-Year MANDATE: Morocco $Benchmark 7Y, 12Y, 30Y Investor Call – The 10-Year 30-Year Kingdom of Morocco rated BBB-/BB+ (negative/stable) by S&P/Fitch, has mandated Barclays, BNP Paribas, J.P. Morgan and NATIXIS as Joint Lead Managers and Joint Bookrunners to make available to investors a recorded call starting on Monday 7th December 2020. A potential tripletranche 144A/Regulation S USD-denominated senior unsecured benchmark offering across 7-year, 12-year and 30-year tranches is expected to follow subject to market conditions. (Source: Bloomberg) Maturity Yield % 0.2095 0.2263 0.4552 0.6729 0.9363 1.4055 Currencies 1D ∆ (bps) 0.02 0.08 0.43 0.61 0.72 0.71 YTD ∆ (%) -88.2 -86.7 -73.7 -62.6 -50.6 -32.8 US Treasuries 2-Year 5-Year 10-Year 30-Year 12 Months 8/12/2020 31/12/2019 1.9375 3.1875 0.9488 2.3071 2.6833 2.8333 1.2631 2.5333 0.5919 2.2900 -0.4900 -0.2490 0.3368 1.9963 KWD SAR BHD QAR OMR AED USD 0.3044 3.7515 0.3771 3.6417 0.3850 3.6731 UK Guilts Yield % 0.14 0.39 0.93 1.69 1D ∆ (%) 0.00 -0.02 -0.08 -0.20 Yield % -0.09 -0.03 0.28 0.85 1D ∆ (bps) 0.0000 0.0053 0.0106 -0.0082 0.0000 0.0000 YTD ∆ (%) -0.43 0.01 0.01 0.00 0.00 0.00 German Bunds 1D ∆ (%) 0.06 0.24 0.82 1.76 Yield % -0.77 -0.79 -0.64 -0.16 1D ∆ (%) 0.01 0.08 0.31 1.14 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 8-Dec 2020 31-Dec 2019 Kuwait 39.18 36.700 KSA 63.91 56.915 Abu Dhabi 34.71 36.090 Dubai 102.16 91.005 Qatar 35.22 36.705 Bahrain 243.50 175.995 Oman 351.40 234.400 Iraq 490.67 383.680 Egypt 332.71 277.420 Morocco 86.20 91.435 Turkey 355.52 282.130 US 12.59 10.810 UK 16.30 16.210 China 28.75 31.205 Japan 14.52 21.042 Germany 9.55 7.080 France 15.75 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.