| 02/09/2021 | 26/08/2021 | Change | Year to Date | |
| BLOM Bond Index (BBI) | 13.45 | 13.20 | 1.89% | -5.11% |
| Weighted Yield | 87.08% | 87.80% | -0.82% | 4.22% |
| Weighted Spread | 8,703 | 8,775 | -0.82% | 5.13% |
| 02/09/2021 | 26/08/2021 | |
| BBI | 13.45 | 13.20 |
| JP Morgan EMBI | 939.43 | 932.78 |
| 5Y LEB | 73.55% | 75.05% |
| 10Y LEB | 56.80% | 57.65% |
| 5Y US | 0.78% | 0.84% |
| 10Y US | 1.29% | 1.34% |
| 5Y SPREAD | 7,277 | 7,421 |
| 10Y SPREAD | 5,551 | 5,631 |
This week, another failed attempt to form a government has occurred. Cabinet formation was up in the air until an expected conflict crushed hopes for breaking the political standstill and deadlock in the country. Moreover, talks about raising the exchange rate of BDL circular 151’s withdrawals are looming as the Central Bank governor and the Head of the Finance and Budget Committee met on Thursday and discussed this matter. However, final decision hasn’t taken yet as the committee would discuss the issue next week.
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 1.89% to stand at 13.45 points by the week ending September 02, 2021 compared to the week of August 26, 2021. Meanwhile, the JP Morgan EMBI slightly increased from 932.78 to 939.43 during the period.
In addition, the yields on the 5 years (5Y) and 10 years (10Y) Lebanese Eurobonds decreased by 150 basis points (bps) and 85 (bps) to end up the period at 73.55% and 56.80%, respectively.
In the US, the yields on 5 year and 10 year US treasuries recorded a decrease from the week ending August 26, 2021 from 0.84% and 1.34% to 0.78% and 1.29%, respectively, by the week ending September 02.
This week, the bond king “Bill Gross “ mentioned that long term Treasury yields are so low that the funds that buy them belong to investment garbage. Moreover, Fed’s chairman declared during last week’s annual Jackson Hole symposium that the Central Bank would begin to reduce its bond purchases before the end of this year. In the same token, the European Central Bank (ECB)’s decision about tapering the emergency bond-buying program is looming as inflation reached an all-time high level of 3% in a decade. Adding on, the Bloomberg U.S. Treasury index fell 1.4% this year showing a first annual loss in eight years.
In turn, the 5Y and 10Y spread between the yield on Lebanese Eurobonds and their US comparable went down from 7,421 bps and 5,631 bps to 7,277 bps and 5,551 respectively.
| 5Y Credit Default Swaps (CDS) | ||
| 02/09/2021 | 26/08/2021 | |
| Lebanon | . | . |
| KSA | 50 | 53 |
| Dubai | 90 | 92 |
| Brazil | 175 | 182 |
| Turkey | 367 | 373 |
| Source: Bloomberg | ||
Weekly Change of Lebanese Eurobonds Prices
| Prices | Weekly | Yields | Weekly | ||||
| Maturity | Coupon in % | 02/09/2021 | 26/08/2021 | Change | 02/09/2021 | 26/08/2021 | Change bps |
| 27/01/2023 | 6.00 | 13.00 | 12.71 | 2.24% | 240.12% | 240.55% | -43 |
| 22/04/2024 | 6.65 | 12.82 | 12.75 | 0.57% | 122.76% | 122.41% | 35 |
| 04/11/2024 | 6.25 | 12.82 | 12.69 | 0.98% | 102.17% | 102.30% | -13 |
| 03/12/2024 | 7.00 | 12.80 | 12.71 | 0.70% | 103.34% | 103.37% | -3 |
| 26/02/2025 | 6.20 | 12.79 | 12.68 | 0.88% | 94.78% | 95.01% | -24 |
| 12/06/2025 | 6.25 | 13.04 | 12.95 | 0.64% | 87.29% | 87.35% | -6 |
| 28/11/2026 | 6.60 | 13.00 | 12.75 | 1.96% | 70.75% | 71.53% | -79 |
| 23/03/2027 | 6.85 | 12.97 | 12.75 | 1.73% | 69.89% | 70.55% | -66 |
| 29/11/2027 | 6.75 | 13.05 | 12.78 | 2.07% | 64.62% | 65.47% | -85 |
| 03/11/2028 | 6.65 | 12.88 | 12.78 | 0.74% | 60.59% | 60.84% | -26 |
| 26/02/2030 | 6.65 | 13.00 | 12.62 | 2.95% | 56.70% | 58.04% | -134 |
| 22/04/2031 | 7.00 | 12.78 | 12.67 | 0.85% | 57.43% | 57.80% | -37 |
| 23/03/2032 | 7.00 | 13.08 | 12.72 | 2.89% | 55.42% | 56.78% | -135 |
| 02/11/2035 | 7.05 | 13.02 | 12.75 | 2.10% | 54.17% | 55.23% | -106 |
| 23/03/2037 | 7.25 | 13.52 | 13.03 | 3.80% | 53.64% | 55.58% | -194 |
Source: BLOMInvest Bank