Demand for Lebanese Eurobonds Slightly Improved this Week

The Lebanese Eurobonds improved for the third week running, with the BLOM Bond Index (BBI) adding a mere 0.03% to 103.66 points.

Nevertheless, the Lebanese gauge could not outperform the JP Morgan Emerging Markets’ Bond Index which increased by a weekly 0.38% to 705.69 points.

Back to the Lebanese market, demand for medium-term Eurobonds remained unchanged as the yield for the 5Y Lebanese Eurobonds steadied at 6.25%, while that of the long-term maturities slightly progressed as shown by the 10Y yields which barely lost 1 basis point (bp) to 6.76%.

Similarly, demand for US treasuries increased over the week after the FED’s chair Janet Yellen assured that an interest rates’ hike will not take place in the near future. This has sent investors’ back to the safe assets’ market. Hence, the 5 Year and 10 Year yields in the US decreased from 1.37% and 1.88% to 1.21% and 1.78%, respectively.

Therefore, the spread between the yields on the 5Y and 10Y Lebanese Eurobonds and their US comparable broadened by 16 bps and 9 bps to end the week at the 504 bps and 498 bps, respectively.  

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