BLOM Bond Index (BBI) Fell by 0.35% Weekly

Lebanon’s Eurobonds market performed poorly during the week, where the BLOM Bond Index (BBI) fell by 0.35%, to settle at 107.92 points. The gauge posted a 2.15% year-to-date (y-t-d) increase. The falling off of the Eurobonds market can be attributed to a weekly increase in 5Y and 10Y yields of 8 basis points (bps) and 3 bps, respectively.

 Slowing worldwide economic growth has negatively impacted investments in emerging markets, with the JP Morgan emerging countries’ bond index weekly performance demonstrating a weekly decline of 0.60% to 674.78 bps.

The continuous slowing of the worldwide economy and failures of stock markets internationally has driven up the demand for safe investments. In the U.S, the return to the bonds market sent the 5Y and 10Y U.S yields down by 19 bps and 17 bps to 1.39% and 2.17%, respectively. Correspondingly, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark respectively widened by 27 bps and 20 bps to 383 bps and 407 bps.

Lebanon’s Credit Default Swaps for 5 years (CDS) stood at 400-430 bps, compared to last week’s quote of 334-364 bps. In regional economies, the 5Y CDS quotes of Saudi Arabia and Dubai broadened from 53-58 bps and 164-174 bps to 59-64 bps and 190-200 bps, respectively. In emerging economies, the global trend continued, as the 5Y CDS of Brazil and Turkey widened from 154-156 bps and 193-196 bps to 163-165 bps and 200-204 bps.

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