26/08/2021 | 18/08/2021 | Change | Year to Date | |
BLOM Bond Index (BBI) | 13.20 | 12.90 | 2.33% | -6.88% |
Weighted Yield | 87.80% | 88.76% | -1.08% | 4.94% |
Weighted Spread | 8,775 | 8,869 | -1.06% | 6.00% |
26/08/2021 | 18/08/2021 | |
BBI | 13.20 | 12.90 |
JP Morgan EMBI | 932.78 | 930.83 |
5Y LEB | 75.05% | 76.01% |
10Y LEB | 57.65% | 57.90% |
5Y US | 0.84% | 0.79% |
10Y US | 1.34% | 1.27% |
5Y SPREAD | 7,421 | 7,522 |
10Y SPREAD | 5,631 | 5,663 |
Lebanon’s consensus-based power sharing system has led to an extreme complicated political situation today. However, Lebanese people are waiting for the birth of the long- awaited government this week that should be capable of halting the collapse and setting a comprehensive reform plan. Moreover this week, the government has reduced partially the fuel subsidies as a way to ease the foreign currency shortage in the country.
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 2.33% to stand at 13.20 points by the week ending August 26, 2021 compared to the week of August 18, 2021. Meanwhile, the JP Morgan EMBI slightly increased from 930.83 to 932.78 during the period.
In addition, the yields on the 5 years (5Y) and 10 years (10Y) Lebanese Eurobonds decreased by 96 basis points (bps) and 25 (bps) to end up the period at 75.05% and 57.65%, respectively.
In the US, the yields on 5 year and 10 year US treasuries recorded an increase from the week ending August 18, 2021 from 0.79% and 1.27% to 0.84% and 1.34%, respectively, by the week ending August 26.
This week, the US bond market increased amid the awaited Federal Reserve’s annual Jackson Hole summit on Friday. The virtual summit conference will bring together central bankers from around the world while the investors focusing on Fed’s policy regarding the Central Bank tailing off its decision of buying at least $120 B of bonds per month.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable went down from 7,522 bps and 5,663 bps to 7,421 bps and 5,631 respectively.
5Y Credit Default Swaps (CDS) | ||
26/08/2021 | 18/08/2021 | |
Lebanon | . | . |
KSA | 53 | 55 |
Dubai | 92 | 91 |
Brazil | 182 | 191 |
Turkey | 373 | 392 |
Source: Bloomberg |
Weekly Change of Lebanese Eurobonds Prices
Prices | Weekly | Yields | Weekly | ||||
Maturity | Coupon in % | 26/08/2021 | 18/08/2021 | Change | 26/08/2021 | 18/08/2021 | Change bps |
27/01/2023 | 6.00 | 12.71 | 12.26 | 3.66% | 240.55% | 242.26% | -171 |
22/04/2024 | 6.65 | 12.75 | 12.45 | 2.37% | 122.41% | 123.19% | -78 |
04/11/2024 | 6.25 | 12.69 | 12.27 | 3.41% | 102.30% | 103.80% | -150 |
03/12/2024 | 7.00 | 12.71 | 12.20 | 4.21% | 103.37% | 105.52% | -215 |
26/02/2025 | 6.20 | 12.68 | 12.55 | 1.04% | 95.01% | 95.00% | 1 |
12/06/2025 | 6.25 | 12.95 | 12.60 | 2.78% | 87.35% | 88.49% | -114 |
28/11/2026 | 6.60 | 12.75 | 12.48 | 2.17% | 71.53% | 72.39% | -86 |
23/03/2027 | 6.85 | 12.75 | 12.48 | 2.20% | 70.55% | 71.39% | -85 |
29/11/2027 | 6.75 | 12.78 | 12.44 | 2.78% | 65.47% | 66.64% | -117 |
03/11/2028 | 6.65 | 12.78 | 12.46 | 2.64% | 60.84% | 61.93% | -109 |
26/02/2030 | 6.65 | 12.62 | 12.33 | 2.40% | 58.04% | 59.03% | -100 |
22/04/2031 | 7.00 | 12.67 | 12.63 | 0.32% | 57.80% | 57.90% | -10 |
23/03/2032 | 7.00 | 12.72 | 12.47 | 1.94% | 56.78% | 57.68% | -90 |
02/11/2035 | 7.05 | 12.75 | 12.59 | 1.25% | 55.23% | 55.87% | -64 |
23/03/2037 | 7.25 | 13.03 | 12.83 | 1.56% | 55.58% | 56.37% | -79 |
Source: BLOMInvest Bank