The BLOM Bond Index (BBI) registered a minor uptick of 0.02% over the past week to reach 107.148 points. The Lebanese gauge outperformed the JP Morgan Emerging Markets’ Bond Index which lost a weekly 0.11% to 672.15 points.
The yield on the Lebanese Eurobonds maturing in 5Y rose by one basis point (bp) from 5.34% to 5.35%, while that of the 10Y declined by 2 basis points (bps) to 6.21%.
Demand for US treasuries was more pronounced over the past week. In fact, the yield on the 5Y notes declined from last week’s 1.62% to 1.58% and the yield on the 10Y treasuries slid from 2.23% to 2.19%. Although China has trimmed its holdings of US treasuries by around $180B in order to support its sluggish growth and failing stock market, demand for US treasuries is still strong due to a broad buyers’ base.
Accordingly the spread between the yields on the 5Y Lebanese Eurobonds and their US comparable broadened from 372 bps to 377 bps while the 10Y spread widened from 400 bps to 402 bps.
Lebanon’s 5Y Credit Default Swaps (CDS) broadened from last week’s 350-383 bps to 358-383 bps , the 5Y CDS quotes of Saudi Arabia also grew from 60-68 bps to 61-66 bps, Dubai’s 5Y CDS quote widened from 173-188 bps to 182-191 bps and Turkey’s 5Y CDS quotes grew from 237-240 bps to 257-260 bps. In contrast, Brazil’s 5Y CDS quotes narrowed from 329-333 bps to 307-311 bps.
| 13/08/2015 | 06/08/2015 | Change | Year to Date | ||
| BLOM Bond Index (BBI)* | 107.148 | 107.131 | 0.02% | 1.01% | |
| Weighted Yield** | 5.48% | 5.47% | 0 | 46 | |
| Weighted Spread*** | 388 | 384 | 4 | -42 |