Demand for the Lebanese Eurobonds fell over the past week, as reflected by the BLOM Bond Index (BBI) which lost 0.34% to reach 103.65 points.
The BBI outperformed the JP Morgan Emerging Markets’ Bond Index which lost a weekly 0.72% to 725.57 points.
Demand for Lebanese Eurobonds maturing in 5 years and 10 years declined over the past week with their yields rising from 6.13% and 6.73% to 6.15% and 6.78%, respectively.
After the Federal Reserve held rates unchanged and after the Bank of Japan refrained from adding new stimulus, investors rushed towards safe-haven assets. The 5Y and 10Y yields for US treasuries dropped from last week’s 1.23% and 1.71% to 1.1% and 1.57%, respectively.
Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable widened from 490 bps and 502 bps to 505 bps and 521 bps, respectively.
5 Year Credit Default Swaps, Mid-Prices (in basis points)
16/06/2016 | 08/06/2016 | |
Lebanon | 473 | 457 |
KSA | 185 | 170 |
Dubai | 217 | 211 |
Brazil | 347 | 334 |
Turkey | 264 | 248 |