Demand for Lebanese Eurobonds declined during the week, as reflected by the BLOM Bond Index (BBI) that declined by 0.58%, to end the week at 102.43 points. However, the Lebanese Eurobond Market fared better than bonds in emerging markets, as the BBI outperformed the JP Morgan Emerging Markets’ Bond Index, which fell by a weekly 0.70% to 657.21 points.
The yields on the 5Y and 10Y Lebanese Eurobonds went up by 24 basis points (bps) and 10 bps, during the week, to 6.64% and 6.94%, respectively.
In contrast, global deflationary pressures kept on pushing investors’ preferences in favor of the safer US treasuries. This was shown by the yields on the 5Y and 10Y US treasuries that declined by 8 bps each, to 1.44% and 2.02%, respectively.
Consequently, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable broadened from last week’s 488 bps and 474 bps to 520 bps and 492 bps, respectively.
5 Year Credit Default Swaps, MENA Region
| 21/01/2016 | 14/01/2016 | |
| Mid-Price | Mid-Price | |
| Lebanon | 443 | 442 |
| KSA | 199 | 196 |
| Dubai | 310 | 294 |
| Brazil | 283 | 488 |
| Turkey | 483 | 303 |