Lebanese Eurobonds Market Followed the Downtrend of the US and Emerging Market

18/09/201411/09/2014 ChangeYear to Date
BLOM Bond Index (BBI)*108.202108.409-0.19%2.42%
Weighted Yield**5.14%5.11%312
Weighted Spread***337339-2-93


Lebanon’s Eurobonds market followed the trend of the US and of the emerging market. Demand for Lebanon’s Eurobonds declined this week, pushing the BLOM Bond Index (BBI) down by 0.19% to 108.20 points, but the index is still up 2.42% since year start. The weakened demand for Eurobonds was reflected on the 5Y and 10Y yields, inching up by 3 basis points (bps) and 4 bps to 5.08% and 6.19%, respectively.

Investors diverted away from emerging market’s bonds, where the JP Morgan emerging countries’ bond index performed worse than the BBI, falling by 3.38% over the week to 675.40 points.

 Voting for Scotland to remain in the United Kingdom curbed demand for U.S safe treasuries, where 5Y and 10Y treasury yields escalated to 1.85% and 2.63%, up by 6 bps and 9 bps from the prior week’s levels. As a result, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark narrowed by 3bps and 5 bps to 323 bps and 356 bps, respectively.

Lebanon’s credit default swap for 5 years (CDS) remained unchanged from last week’s quote at 330-360 bps. Similarly, in regional economies, 5Y CDS quotes of Saudi Arabia steadied at 46-51 bps. Dubai 5Y CDS widened from 148-158 bps to 150-160 bps. Likewise, the 5Y CDS of Brazil and Turkey broadened from 136-138 bps and 176-179 bps to 138-140 bps and 183-186 bps, respectively.

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