Lebanon’s Eurobonds Market Followed Global Markets on Brexit News

Higher demand was registered for Lebanese Eurobonds over the past week, as reflected by the BLOM Bond Index (BBI) which gained 0.35% to reach 102.93 points.

The BBI was outperformed by the JP Morgan Emerging Markets’ Bond Index which gained a weekly 1.19% to 743.81 points.

Demand for Lebanese Eurobonds maturing in 5 years and 10 years increased over the past week with their yields declining from 6.38% and 7.00% to 6.31% and 6.94%, respectively.

The aftermath of the UK referendum continued to affect global financial markets with investors shifting towards safe assets. US treasuries followed the same path with their yields falling to record lows. In specific, the 5Y and 10Y yields for US treasuries fell from last week’s 1.25% and 1.74% to 1.01% and 1.49%, respectively.

Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable widened from 513 bps and 526 bps to 530 bps and 545 bps, respectively.  

5 Year Credit Default Swaps, Mid-Prices (in basis points)

30/06/201623/06/2016
Lebanon467464
KSA173176
Dubai178185
Brazil315331
Turkey243259

 

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