The JP Morgan Emerging Outperformed Lebanon’s Blom Bond Index Markets’ Bond Index over the Past Week

As reflected by the BLOM Bond Index (BBI), the Lebanese Eurobonds market observed a fall in the past week, where the index dropped by 0.06% to 103.29 points, mainly due to the lower demand for both 5 year and 10 year Lebanese Eurobonds.

Moreover, the BBI was outperformed by the JP Morgan Emerging Markets’ Bond Index which gained a weekly 0.36% to 757.30 points.

Yields on the Lebanese Eurobonds maturing in 5 years increased from 6.17% and 6.85% to 6.19% and 6.86%, respectively.

Demand for US treasuries have increased this week, mainly due to Bank of England’s stimulus measures, where the bank cut interest rates 25 basis points to 0.25 percent for the first time since 2009. This move made investors shift their preferences to US safe assets, which have become more competitive and attractive. As such, the yields on the US treasuries maturing in 5 years and 10 years decreased from 1.09% and 1.52% last week to 1.03% and 1.51% this week, respectively.

Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable widened from 508 bps and 533 bps to 516 bps and 535 bps, respectively.  

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

04/08/201628/07/2016
Lebanon478476
KSA184180
Dubai173173
Brazil277297
Turkey271277

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