mashreq Fixed Income Trading Daily Bond Market Update Market Update • • • • • • Financal Results Update • • • New Issues Update • • • • • Rating Update • • Oil prices remain under pressure Brent crude posted a sixth weekly loss, the longest losing streak since 2002, as OPEC boosted production to a 14-month high amid a global surplus. West Texas Intermediate posted the biggest monthly drop in more than two years. Brent fell 9.3% in October, which is the biggest monthly decline since May 2012. Brent for December settlement slid 38 cents, or 0.4% to USD 85.86/bbl. WTI for December delivery declined 58 cents, or 0.7%, to USD 80.54/bbl. (Bloomberg) Sunday, November 02, 2014 BOJ surprisingly announced expansion in bond purchases followed by GPIF’s plans to double equities allocation The Governor of BOJ Haruhiko Kuroda on Friday surprised the markets by announcing an expansion in the bank’s bond buying program under its unprecedented monetary stimulus. BOJ’s plan to expand bond buying came just two days after the Fed announced an end to monthly bond purchases. The BOJ will buy assets from government debt to real-estate investment trusts and plans to expand the monetary base by 80 trillion yen (USD 713 billion) a year, up from a previous 60 trillion to 70 trillion yen. A few hours later, the Government Pension Investment Fund, under Takahiro Mitani, said it would put half its holdings in local and foreign stocks, effectively doubling the allocation to equities. GPIF set allocation targets of 25% each for Japanese and overseas equities, up from 12% each. The pension fund will reduce domestic bonds to 35% of assets from 60%. The two major announcements caused a significant drop in yen, which tumbled to its weakest level in almost 7 years. The yen touched 112.48 per dollar, the lowest since December 2007, before ending the month of October down 2.4% at 112.32. This was yen’s fourth straight month of decline versus the dollar. The pension fund announcement boosted Japanese equities and the Nikkei-225 Stock Average surged 4.8% on Friday. The Topix index soared the most in a year and erased all its YTD losses in just one day. (Bloomberg) US equities reach record high, closing the month of October on a positive note US equities rallied and ended the month of October, one of the most volatile in 6 years, with positive performance. Strong corporate earnings and improving US economic data provided a boost to equities in the last week of October and took both the S&P 500 and the Dow Jones Industrial indices to all-time highs. The S&P 500 index posted a return of 2.72% during the last week and closed at 2018. The index is up 8.4% since sinking to a 6-month low on 15th October. The DJIA was up 3.5% for the week, its best weekly return since January 2013. (Bloomberg) MTN Group may issue a bond this week MTN Group (BBB/Baa2/-), a leading multinational mobile operator headquartered in Johannesburg, South Africa, may issue a dollar bond this week following the roadshow which commenced on October 27th. As per the lead arrangers, MTN may raise USD 500 – 750 million with a 7 – 10 year term from the bond sale. (Lead Manager) DIFC Investment’s roadshow is happening today in Abu Dhabi and Dubai. US treasury yields inch up on Fed’s hawkish tone The US treasury yields rose after the hawkish tone in the FOMC announcement. The two-year yield rose 11 bps last week to 0.50%, rising the most since July 2011, after the Fed ended its bond purchases and noted labor-market gains. The five-year yields reached a three-week high of 1.63%, while the benchmark 10-year yield climbed seven bps to 2.335%. (Bloomberg) Kurdistan eyes debt financing The Kurdistan Regional Government is sounding out investors about a potential debt financing. Kurdish officials led by the deputy prime minister were in London this week holding private talks with fixed-income accounts, according to investors. Deutsche Bank and Goldman Sachs arranged the meetings, the investors added. Kurdistan, a semi-autonomous region of northern Iraq, needs money to meet a growing security bill, to pay public-sector employees and to fund much-needed infrastructure development. (Zawya) Egypt signs $350 mln in oil, power financing deals with Saudi Arabia Egypt signed $350 million worth of financing agreements with Saudi Arabia on Saturday aimed at upgrading its power grid and securing imports of petroleum products as it seeks to end its worst energy crisis in decades. Two loan agreements signed on Saturday worth a total of about $100 million will be invested in two electricity stations that are expected to boost the capacity of the national grid. A further $250 million in assistance will come in the form of petroleum products. (Bloomberg) Emaar's malls unit posts 55% jump in Q3 net profit Emaar Malls Group (EMG), a unit of Emaar Properties that listed on the emirate's main stock market in October, reported a 55.2% rise in third-quarter net profit on Thursday. The retail and malls unit of Dubai's largest developer made a quarterly profit of AED321.18mn ($87.5mn), up from AED206.97mn in the corresponding period of 2013. Quarterly revenue was AED649.88mn versus AED542.74mn a year ago. (Bloomberg) Saudi Arabia’s Kingdom Holding Q3 Net Profit Rises 20.5% Saudi Arabia's Kingdom Holding , the investment firm owned by billionaire Prince Alwaleed bin Talal, posted a 20.5 per cent rise in third-quarter net profit on Thursday, on the back of higher investment profits. Kingdom made a net profit of SR265 million ($70.6 million) in the three months ended September 30, compared to SR219.9 million in the same period a year earlier, it said in a bourse statement. It attributed the rise to an increase in profits from investments and to lower finance charges. (Bloomberg) Turkiye Halk Bankasi reduced full year profit forecast on the back of rising loan losses Turkiye Halk Bankasi, Turkey’s biggest publicly traded state bank, cut its 2014 profit forecast as a loan valued at 1.08 billion liras (USD 490 million) became non-performing. The bank forecasts a 15% contraction in profit this year, compared with previous guidance, Elvan Oztabak, head of investor relations, said on the lender’s earnings call last week. The bank reported profit of 601 million liras for the third quarter, narrowly beating analysts’ estimates. Halkbank used 132 million liras of its free provisions to cover 20% of a loan made to electricity grid operator Osmangazi Elektrik Dagitim AS and said that it expects to set aside more provisions, increasing the ratio to 50 percent next quarter. Halkbank’s non-performing loan ratio rose by more than 1 percentage point to 3.7% in the third quarter, compared with an industry average of 2.9%. (Bloomberg) China Construction Bank to conduct investor meetings China Construction Bank (Asia) Corporation Limited, rated A2 (stable) by Moody's and A (stable) by Fitch, has appointed Deutsche Bank and HSBC to arrange a series of fixed income investor meetings in Europe commencing on Wednesday 5 November 2014. (Lead Manager) JSW Steel to conduct roadshows for a new bond issue JSW Steel Limited, expected to be rated Ba1 (Stable) by Moody’s and BB+ (Stable) by Fitch, has mandated banks to arrange a series of fixed income investor meetings in Hong Kong, Singapore, and London commencing 3rd November. A Regulation S USD denominated senior unsecured notes offering may follow subject to market conditions. The Notes are expected to be rated Ba1 by Moody’s and BB+ by Fitch. (Lead Manager) In a note on Friday, rating agency Fitch Inc. assigned a BB+ rating with a stable outlook on the bond. “JSW Steel benefits from its low cost base due to its low conversion costs (cost to convert raw materials to finished products). The company’s efficient operations are reflected in its strong profitability. Fitch expects JSW Steel’s financial profile to improve over the near to medium term, supported by higher production volumes following expanded capacity and better profitability,” Fitch said in the note. (Bloomberg) Indiabulls readies for an inaugural bond sale Century Limited, a Jersey wholly owned subsidiary of Indiabulls Real Estate Limited has mandated Deutsche Bank as the Sole Bookrunner and Lead Manager to arrange fixed income investor meetings in Asia and Europe commencing on October 31,2014. A Reg S offering of US-dollar fixed rate senior notes may follow, subject to market conditions. Moody’s and Fitch have assigned the proposed US dollar denominated guaranteed notes a provisional rating of B1 and B+ respectively. (Lead Manager) Roadshow Schedule Fri Oct 31st : Singapore Mon Nov 3rd : Hong Kong Tue Nov 4th : London Mubadala GE Capital Ltd. may issue a bond this week Mubadala GE Capital Ltd’s roadshow ended on the October 31st and a dollar issue is expected this week. S&P raises credit rating outlook on Ras Al Khaimah to stable Months after tagging Ras Al Khaimah’s credit rating with a negative outlook, Standard & Poor’s has raised the outlook to stable and said the emirate is improving the reliability of its economic data. “We view the authorities’ progress and long-term commitment to strengthen the emirate of Ras Al Khaimah’s government institutions and address data shortcomings as a positive development,” the agency said in a report late Friday. The agency now rates RAK as “stable” with its A/A-1 ratings affirmed. S&P revises outlook on Jordan On Oct. 31, 2014, Standard & Poor's Ratings Services revised its outlook on the Hashemite Kingdom of Jordan to stable from negative. At the same time, the rating agency affirmed the long- and short-term foreign and local currency sovereign credit ratings on Jordan at 'BB-/B'. (Bloomberg) Page 1
20
Embed
Fixed Income Trading - Mashreq...Fixed Income Trading ... used 132 million liras of its free provisions to cover 20% of a loan made to electricity grid operator Osmangazi Elektrik
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
mashreqFixed Income Trading
Daily Bond Market Update
Market Update
•
•
•
•
•
•
Financal Results Update
•
•
•
New Issues Update
•
•
•
•
•
Rating Update
•
•
Oil prices remain under pressure
Brent crude posted a sixth weekly loss, the longest losing streak since 2002, as OPEC boosted production to a 14-month high amid a global surplus. West
Texas Intermediate posted the biggest monthly drop in more than two years. Brent fell 9.3% in October, which is the biggest monthly decline since May
2012. Brent for December settlement slid 38 cents, or 0.4% to USD 85.86/bbl. WTI for December delivery declined 58 cents, or 0.7%, to USD 80.54/bbl.
(Bloomberg)
Sunday, November 02, 2014
BOJ surprisingly announced expansion in bond purchases followed by GPIF’s plans to double equities allocation
The Governor of BOJ Haruhiko Kuroda on Friday surprised the markets by announcing an expansion in the bank’s bond buying program under its
unprecedented monetary stimulus. BOJ’s plan to expand bond buying came just two days after the Fed announced an end to monthly bond purchases.
The BOJ will buy assets from government debt to real-estate investment trusts and plans to expand the monetary base by 80 trillion yen (USD 713
billion) a year, up from a previous 60 trillion to 70 trillion yen. A few hours later, the Government Pension Investment Fund, under Takahiro Mitani, said it
would put half its holdings in local and foreign stocks, effectively doubling the allocation to equities. GPIF set allocation targets of 25% each for Japanese
and overseas equities, up from 12% each. The pension fund will reduce domestic bonds to 35% of assets from 60%.
The two major announcements caused a significant drop in yen, which tumbled to its weakest level in almost 7 years. The yen touched 112.48 per dollar,
the lowest since December 2007, before ending the month of October down 2.4% at 112.32. This was yen’s fourth straight month of decline versus the
dollar. The pension fund announcement boosted Japanese equities and the Nikkei-225 Stock Average surged 4.8% on Friday. The Topix index soared the
most in a year and erased all its YTD losses in just one day. (Bloomberg)
US equities reach record high, closing the month of October on a positive note
US equities rallied and ended the month of October, one of the most volatile in 6 years, with positive performance. Strong corporate earnings and
improving US economic data provided a boost to equities in the last week of October and took both the S&P 500 and the Dow Jones Industrial indices to
all-time highs. The S&P 500 index posted a return of 2.72% during the last week and closed at 2018. The index is up 8.4% since sinking to a 6-month low
on 15th October. The DJIA was up 3.5% for the week, its best weekly return since January 2013. (Bloomberg)
MTN Group may issue a bond this week
MTN Group (BBB/Baa2/-), a leading multinational mobile operator headquartered in Johannesburg, South Africa, may issue a dollar bond this week
following the roadshow which commenced on October 27th. As per the lead arrangers, MTN may raise USD 500 – 750 million with a 7 – 10 year term
from the bond sale. (Lead Manager)
DIFC Investment’s roadshow is happening today in Abu Dhabi and Dubai.
US treasury yields inch up on Fed’s hawkish tone
The US treasury yields rose after the hawkish tone in the FOMC announcement. The two-year yield rose 11 bps last week to 0.50%, rising the most since
July 2011, after the Fed ended its bond purchases and noted labor-market gains. The five-year yields reached a three-week high of 1.63%, while the
benchmark 10-year yield climbed seven bps to 2.335%. (Bloomberg)
Kurdistan eyes debt financing
The Kurdistan Regional Government is sounding out investors about a potential debt financing. Kurdish officials led by the deputy prime minister were in
London this week holding private talks with fixed-income accounts, according to investors. Deutsche Bank and Goldman Sachs arranged the meetings, the
investors added. Kurdistan, a semi-autonomous region of northern Iraq, needs money to meet a growing security bill, to pay public-sector employees and
to fund much-needed infrastructure development. (Zawya)
Egypt signs $350 mln in oil, power financing deals with Saudi Arabia
Egypt signed $350 million worth of financing agreements with Saudi Arabia on Saturday aimed at upgrading its power grid and securing imports of
petroleum products as it seeks to end its worst energy crisis in decades. Two loan agreements signed on Saturday worth a total of about $100 million will
be invested in two electricity stations that are expected to boost the capacity of the national grid. A further $250 million in assistance will come in the
form of petroleum products. (Bloomberg)
Emaar's malls unit posts 55% jump in Q3 net profit
Emaar Malls Group (EMG), a unit of Emaar Properties that listed on the emirate's main stock market in October, reported a 55.2% rise in third-quarter
net profit on Thursday. The retail and malls unit of Dubai's largest developer made a quarterly profit of AED321.18mn ($87.5mn), up from AED206.97mn
in the corresponding period of 2013. Quarterly revenue was AED649.88mn versus AED542.74mn a year ago. (Bloomberg)
Saudi Arabia’s Kingdom Holding Q3 Net Profit Rises 20.5%
Saudi Arabia's Kingdom Holding , the investment firm owned by billionaire Prince Alwaleed bin Talal, posted a 20.5 per cent rise in third-quarter net profit
on Thursday, on the back of higher investment profits. Kingdom made a net profit of SR265 million ($70.6 million) in the three months ended September
30, compared to SR219.9 million in the same period a year earlier, it said in a bourse statement. It attributed the rise to an increase in profits from
investments and to lower finance charges. (Bloomberg)
Turkiye Halk Bankasi reduced full year profit forecast on the back of rising loan losses
Turkiye Halk Bankasi, Turkey’s biggest publicly traded state bank, cut its 2014 profit forecast as a loan valued at 1.08 billion liras (USD 490 million)
became non-performing. The bank forecasts a 15% contraction in profit this year, compared with previous guidance, Elvan Oztabak, head of investor
relations, said on the lender’s earnings call last week. The bank reported profit of 601 million liras for the third quarter, narrowly beating analysts’
estimates. Halkbank used 132 million liras of its free provisions to cover 20% of a loan made to electricity grid operator Osmangazi Elektrik Dagitim AS
and said that it expects to set aside more provisions, increasing the ratio to 50 percent next quarter. Halkbank’s non-performing loan ratio rose by more
than 1 percentage point to 3.7% in the third quarter, compared with an industry average of 2.9%. (Bloomberg)
China Construction Bank to conduct investor meetings
China Construction Bank (Asia) Corporation Limited, rated A2 (stable) by Moody's and A (stable) by Fitch, has appointed Deutsche Bank and HSBC to
arrange a series of fixed income investor meetings in Europe commencing on Wednesday 5 November 2014. (Lead Manager)
JSW Steel to conduct roadshows for a new bond issue
JSW Steel Limited, expected to be rated Ba1 (Stable) by Moody’s and BB+ (Stable) by Fitch, has mandated banks to arrange a series of fixed income
investor meetings in Hong Kong, Singapore, and London commencing 3rd November. A Regulation S USD denominated senior unsecured notes offering
may follow subject to market conditions. The Notes are expected to be rated Ba1 by Moody’s and BB+ by Fitch. (Lead Manager)
In a note on Friday, rating agency Fitch Inc. assigned a BB+ rating with a stable outlook on the bond. “JSW Steel benefits from its low cost base due to its
low conversion costs (cost to convert raw materials to finished products). The company’s efficient operations are reflected in its strong profitability. Fitch
expects JSW Steel’s financial profile to improve over the near to medium term, supported by higher production volumes following expanded capacity and
better profitability,” Fitch said in the note. (Bloomberg)
Indiabulls readies for an inaugural bond sale
Century Limited, a Jersey wholly owned subsidiary of Indiabulls Real Estate Limited has mandated Deutsche Bank as the Sole Bookrunner and Lead
Manager to arrange fixed income investor meetings in Asia and Europe commencing on October 31,2014. A Reg S offering of US-dollar fixed rate senior
notes may follow, subject to market conditions. Moody’s and Fitch have assigned the proposed US dollar denominated guaranteed notes a provisional
rating of B1 and B+ respectively. (Lead Manager)
Roadshow Schedule
Fri Oct 31st : Singapore
Mon Nov 3rd : Hong Kong
Tue Nov 4th : London
Mubadala GE Capital Ltd. may issue a bond this week
Mubadala GE Capital Ltd’s roadshow ended on the October 31st and a dollar issue is expected this week.
S&P raises credit rating outlook on Ras Al Khaimah to stable
Months after tagging Ras Al Khaimah’s credit rating with a negative outlook, Standard & Poor’s has raised the outlook to stable and said the emirate is
improving the reliability of its economic data. “We view the authorities’ progress and long-term commitment to strengthen the emirate of Ras Al
Khaimah’s government institutions and address data shortcomings as a positive development,” the agency said in a report late Friday. The agency now
rates RAK as “stable” with its A/A-1 ratings affirmed.
S&P revises outlook on Jordan
On Oct. 31, 2014, Standard & Poor's Ratings Services revised its outlook on the Hashemite Kingdom of Jordan to stable from negative. At the same time,
the rating agency affirmed the long- and short-term foreign and local currency sovereign credit ratings on Jordan at 'BB-/B'. (Bloomberg)
Page 1
Change Change USD EUR AED
Spread Day YTD Last 1d Chg Last 1d Chg Last 1d Chg