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Kuwait Financial Centre “Markaz” MENA Daily Fixed Income Report –14 November 2012 News Update GCC Bond & Sukuk: Best and worst Performers (13 November 2012) Abu Dhabi's IPIC picks banks for bond issue- International Petroleum Daily Best daily Performers Worst daily Performers Investment Co ( IPIC ) , the Abu Dhabi government-owned investment change 0.20% DANAGS 7 1/2 10/31/49 vehicle, has mandated banks for a bond issue which could be announced QTELQD 7 7/8 06/10/19 0.15% INTPET 6 7/8 11/01/41 as early as Tuesday, sources familiar with the matter said. IPIC picked BNP NBADUH 0 02/28/18 0.12% INTPET 5 1/2 03/01/22 Paribas , JP Morgan Chase , National Bank of Abu Dhabi , Natixis , RBS and BCOABC 7 7/8 04/08/20 0.11% INTPET 5 11/15/20 Unicredit for the issue, the sources said. Two sources indicated the ADWA 3.925 07/28/20 QTELQD 5 10/19/25 0.11% BHRAIN 6 1/8 07/05/22 upcoming bond would consist of a dollar tranche and another currency, Monthly Best monthly Performers Worst monthly Performers most likely euros. IPIC intends to hold investor meetings ahead of a bond change issue, IFR Markets, a Thomson Reuters unit, separately reported. DANAGS 7 1/2 10/31/49 18.81% GOBLT 0 05/15/12 CBB Sukuk Al-Ijara Oversubscribed- The Central Bank of Bahrain (CBB) announces that the monthly issue of the short-term Islamic leasing bonds, Sukuk Al-Ijara, has been oversubscribed by 264%. Subscriptions worth BD 52.75 million were received for the BD 20 million issue, which carries a maturity of 182 days. The expected return on the issue, which begins on 15 November 2012 and matures on 16 May 2013, is 1.12%. The Sukuk Al-Ijara are issued by the CBB on behalf of the Government of the Kingdom of Bahrain. This is issue No. 87 (BH000368A5L7) of the shortterm Sukuk Al-Ijara series.

QATAR 4 1/2 01/20/22 NBADUH 4.365 08/09/32 NBADUH 5.01 05/22/42 NBADUH 4.8 09/15/36 Best YTD Performers NBADUH 4.8 09/15/36 INTPET 6 7/8 11/01/41 MBPSFN 11 1/4 11/15/15 TAQAUH 6 1/2 10/27/36 NAKHL 10 08/25/16

UAE Plans Quarterly T-Bill Auction Once Debt Law Is Passed - The United Arab Emirates plans to auction 1 billion U.A.E. dirhams ($272 million) worth of treasury bills, known as T-bills, every quarter once a new public debt law is passed, Younis Al Khoori, the U.A.E. finance ministry's under-secretary said Monday. Regardless of the fiscal needs, the ministry of finance is planning to issue debt to meet the U.A.E. markets' requirements...the debt issuing will be every time of the size of one billion dirhams, and this will be issued every quarter or so," Mr. Al Khoori told.

Source: Bloomberg, Markaz Analysis

U.A.E. Banks’ Profitability Hurt as Lending Slows: Arab CreditUnited Arab Emirates’ banks, struggling with bad loans after Dubai teetered on the brink of default in 2009, are seeing profit margins shrink as lending slows and falling interest rates curb gains on investments. The net interest margin, the difference between what banks earn from loans and what they pay on liabilities such as customer deposits, has dropped for the top five U.A.E. lenders this year.

SAIBOR KIBOR BHIBOR QATAR AEIBOR LIBOR EURIBOR JDIBOR TRLIBOR

Tunisia Plans Sukuk as Tourists Look Elsewhere- Tunisia will use proceeds from a 1 billion-dinar ($628 million) debut Islamic bond sale next year to shrink the worst budget deficit in at least 12 years as tourism slows. The Arab nation will issue the notes in local and global tranches in the second half of 2013, Finance Ministry Director General Chaker Soltani said. The country may price the debt at 350 bps to 400 bps over the benchmark mid-swap rate, according to Mashreq Capital DIFC Ltd. Tunisia is rated BBB- at Fitch Ratings Ltd., the lowest investment grade and on par with Turkey, which sold $1.5 bof debut sukuk in September.

5.45% 3.81% 2.54% 2.50% YTD change 40.19% 35.94% 34.42% 33.16% 32.96%

Daily change -0.70% -0.18% -0.17% -0.15% -0.15% Monthly change -19.09% -0.87% -0.66% -0.56% -0.52% YTD change -2.61% -2.20% -2.17% -1.94% -1.76%

BHRAIN 6.273 11/22/18 DAEAVI 11 1/4 08/01/15 BHRAIN 6 1/8 07/05/22 DUGB 4.9 05/02/17 Worst YTD Performers DAEAVI 11 1/4 08/01/15 DUGB 4 02/22/14 TAQAUH 6.6 08/01/13 RAKS 8 07/22/14 ADGB 5 1/2 04/08/14

HSBC/NASDAQ Dubai Middle East US Dollar Sukuk /Bond Index Sukuk 12-Nov-12 31-Dec-11

Total Return 165.263 148.84

Duration Yield 5.039 4.99

Interbank Rates (%)

3-Month 14/11/12 31/12/11 0.9753 0.5188 0.8125 0.5625 1.2100 0.8500 1.2000 0.4300 1.3000 0.9750 0.3117 0.2953 0.1960 0.9643 5.0130 3.8410 6.5596 11.2750

3.56 5.07

Spread 233.704 326.79

Clean Coupon Total Market Cap Price 3.368 105.659 5.36 1525.36 6.80 99.35 5.81 1157.44

Life

6-Month 14/11/12 31/12/11 1.0125 0.7800 1.0625 0.8125 1.5140 1.2583 1.3747 1.1000 1.4713 1.5200 0.5357 0.5810 0.3810 1.2921 5.4470 4.2380 7.0702 11.316

1-Year 14/11/12 1.2875 1.3125 1.8890 1.7214 1.6312 0.8737 0.6070 5.9967 7.3767

U.S. Treasuries 14 November 2012 3-Month 2-Year 3-Year 5-Year 7-Year 10-Year 30-Year

Current Yield (%) 0.10 0.25 0.34 0.63 1.03 1.60 2.73

1-Day ∆ (%) 0.000 -0.008 0.003 -0.006 -0.007 -0.017 -0.022

31/12/11 1.0400 1.3125 1.9583 2.1500 1.9725 1.1281 1.9134 5.2000 11.3743

Sovereign Ratings Moody’s S&P Fitch Abu Aa2 AA AA Dhabi Bahrain Baa1 BBB

BBB

Kuwait

Aa2 AA

AA

Oman

A1

NR

Qatar

Aa2 AA

NR

KSA

Aa3 AA-

AA-

UAE

Aa2 NR

NR

Egypt

B2

B

B+

Lebanon B1

B

B

Turkey

BB

BB+

Tunisia Baa3 BB

BBB-

Ba1

Morocco Ba1 BBB- BBBJordan

Ba2

BB

NR

China

Aa3 AA-

A+

UK

Aaa AAA

AAA

US

Aaa AA+

AAA

USD 5-Year CDS Abu Dhabi Dubai

87.500

USD 0.2821 3.7503 0.3770 3.6411 0.3850 3.6730 6.1154 0.7072 1.2930

1-Day ∆ 0.0023 (0.0001) 0.0000 0.0001 0.0002 0.0001 (0.0005) (0.0005) 0.0024

1 Year (%) -2.283% -0.005% 0.003% 0.006% -0.003% 0.000% -2.241% 0.085% -3.154%

YTD Change -31.1%

246.538 -43.6%

Bahrain

203.570 -46.8%

Qatar

89.530 -29.5%

Saudi

78.245

-39.1%

Egypt

414.855

-35.2%

Lebanon 428.210

9.2%

Turkey

147.3300 -49.5%

Iran Currency KWD SAR BHD QAR OMR AED EGP JOD EUR/USD

A

36.900

Morocco 245.000

-6.4% -8.0%

China

68.640 -53.5%

France

90.135 -59.6%

Germany

31.420 -68.1%

Japan

71.500 -50.5%

UK US

31.570 -68.5% 47.500

-3.0%

This report has been prepared and issued by Kuwait Financial Centre S.A.K (Markaz) , which is regulated by the Capital Markets Authority and the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report cannot be quoted without the prior written consent of Markaz. Any user after obtaining Markaz permission to use this report must clearly mention the source as “Markaz “ .This Report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to its accuracy or completeness. Markaz has no obligation to update, modify or amend this report.For further information, please contact ‘Markaz’ at P.O. Box 23444, Safat 13095, Kuwait. Tel: 00965 1804 800 Fax: 00965 2245 0647 Email: research@markaz.com

A number of sources which include Bloomberg, Zawya, and daily newspapers were utilized in the creation of this report.


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