| 18/08/2021 | 12/08/2021 | Change | Year to Date | |
| BLOM Bond Index (BBI) | 12.90 | 12.84 | 0.46% | -8.99% |
| Weighted Yield | 88.76% | 87.72% | 1.19% | 5.90% |
| Weighted Spread | 7,601 | 8,766 | -13.29% | -8.18% |
| 18/08/2021 | 12/08/2021 | |
| BBI | 12.90 | 12.84 |
| JP Morgan EMBI | 930.83 | 927.86 |
| 5Y LEB | 76.01% | 75.30% |
| 10Y LEB | 57.90% | 57.65% |
| 5Y US | 0.79% | 0.83% |
| 10Y US | 1.27% | 1.36% |
| 5Y SPREAD | 7,522 | 7,447 |
| 10Y SPREAD | 5,663 | 5,629 |
The country has been without a functioning Cabinet for about a year after the massive Port explosion. However, the situation is fast deteriorating especially that the government and the Central Bank are running out of hard currency to subsidize medicines and fuel. In tandem, the newly designated PM Najib Mikati has not succeeded on forming a new Cabinet till date; regardless, some positive vibes seem to take place in the past few days.
As such, the BLOM Bond Index (BBI) which is BLOMInvest Bank’s market value-weighted index tracking the performance of the Lebanese government Eurobonds’ market (excluding coupon payments), increased by 0.46% to stand at 12.90 points by the week ending August 18, 2021 compared to the week of August 12, 2021. Meanwhile, the JP Morgan EMBI slightly increased from 927.86 to 930.83 during the period.
In addition, the yields on the 5 year (5Y) Lebanese Eurobonds rose by 71 basis points (bps) while 10 year (10Y) added 25 basis points (bps) to end the period at 76.01% and 57.90%, respectively.
In the US, the yields on 5 year and 10 year US treasuries recorded a an decrease from the week ending August 12, 2021 from 0.83% and 1.36% to 0.79% and 1.27%, respectively, by the week ending August 18.
In fact, US bond market signals confidence regardless of Fed’s preparation to taper bond purchases. In more details, inflation has soared with the start of the pandemic pushing the Federal Reserve to wisely manage his monetary policy regarding bond purchases and interest rates. However, the recovery of the US economy seems to be on track despite the spread of the Delta variant while investors are keeping a close eye on the Fed’s interest rate policy that has to cool the economy, but the Fed has not committed itself yet to higher rates till it makes sure the recovery is durable.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable progressed from 7,447 bps and 5,629 bps to 7,522 bps and 5,663 respectively.
| 5Y Credit Default Swaps (CDS) | ||
| 18/08/2021 | 12/08/2021 | |
| Lebanon | . | . |
| KSA | 55 | 55 |
| Dubai | 91 | 91 |
| Brazil | 191 | 179 |
| Turkey | 392 | 387 |
| Source: Bloomberg | ||
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 18/08/2021 | 12/08/2021 | Change | 18/08/2021 | 12/08/2021 | Change bps |
| 27/01/2023 | 6.00 | 12.26 | 12.29 | -0.23% | 242.26% | 238.79% | 347 |
| 22/04/2024 | 6.65 | 12.45 | 12.25 | 1.67% | 123.19% | 123.72% | -53 |
| 04/11/2024 | 6.25 | 12.27 | 12.29 | -0.10% | 103.80% | 103.26% | 54 |
| 03/12/2024 | 7.00 | 12.20 | 12.05 | 1.23% | 105.52% | 105.92% | -40 |
| 26/02/2025 | 6.20 | 12.55 | 12.43 | 0.92% | 95.00% | 95.09% | -9 |
| 12/06/2025 | 6.25 | 12.60 | 12.62 | -0.10% | 88.49% | 88.16% | 33 |
| 28/11/2026 | 6.60 | 12.48 | 12.41 | 0.56% | 72.39% | 72.53% | -14 |
| 23/03/2027 | 6.85 | 12.48 | 12.58 | -0.86% | 71.39% | 70.81% | 58 |
| 29/11/2027 | 6.75 | 12.44 | 12.42 | 0.11% | 66.64% | 66.62% | 2 |
| 03/11/2028 | 6.65 | 12.46 | 12.24 | 1.77% | 61.93% | 62.67% | -74 |
| 26/02/2030 | 6.65 | 12.33 | 12.13 | 1.61% | 59.03% | 59.71% | -67 |
| 22/04/2031 | 7.00 | 12.63 | 12.65 | -0.17% | 57.90% | 57.78% | 12 |
| 23/03/2032 | 7.00 | 12.47 | 12.48 | -0.02% | 57.68% | 57.62% | 6 |
| 02/11/2035 | 7.05 | 12.59 | 12.46 | 1.04% | 55.87% | 56.41% | -55 |
| 23/03/2037 | 7.25 | 12.83 | 12.78 | 0.36% | 56.37% | 56.52% | -16 |
Source: BLOMInvest Bank