BBI Gained 0.19% Weekly

 23/10/201416/10/2014 ChangeYear to Date
BLOM Bond Index (BBI)*108.123107.9160.19%2.35%
Weighted Yield**5.20%5.25%-518
Weighted Spread***377394-17-53


Lebanon’s Eurobonds showed improvement during the week, where the BLOM Bond Index (BBI) gained 0.19%, to settle at 108.12 points. The gauge posted a 2.35% year-to-date (y-t-d) increase. The bouncing back of the Eurobonds market can be attributed to a weekly downtick in 5Y and 10Y yields of 4 basis points (bps) and 3 bps to 5.18% and 6.22%, respectively.

Emerging markets have begun to recover from challenging global investment conditions, with the JP Morgan emerging countries’ bond index weekly performance demonstrating a weekly incline of 0.68% to 679.93 bps.

In the U.S,the possibility of extending the Quantitative Easing policy after stalling growth and expectations of declining inflation led to the decline of treasuries. This sent the 5Y and 10Y U.S yields up by 13 bps and 12 bps to 1.52% and 2.29%, respectively. Correspondingly, the 5Y and 10Y spreads between the Lebanese Eurobonds and their U.S benchmark respectively narrowed by 17 bps and 15 bps to 366 bps and 393 bps.

Lebanon’s Credit Default Swaps for 5 years (CDS) tightened to 345-375 bps, compared to last week’s quote of 400-430 bps. In regional economies, the 5Y CDS quote of Saudi Arabia stood at 59-64 bps, the same quote as last week, while the 5Y CDS quote of Dubai narrowed from 190-200 bps to 170-180 bps. In emerging economies, Brazil’s 5Y CDS quote broadened from 163-165 bps to 170-172bps. In contrast, the 5Y CDS quote of Turkey experienced a contraction, from 200-204 bps to 184-186 bps.

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