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Kuwait Financial Centre “Markaz” MENA Daily Fixed Income Report –25 November 2012 News Update GCC Bond & Sukuk: Best and worst Performers (22 November 2012) Dana Gas Debt Deal Said to Include $100 Million Cash PayoutDaily Best daily Performers Worst daily Performers Dana Gas PJSC plans to pay bondholders about $100 million in cash as part change 0.66% DAEAVI 11 1/4 08/01/15 of the $920 million debt restructuring accord the United Arab Emirates DANAGS 7 1/2 10/31/12 0.41% QATDIA 3 1/2 07/21/15 company agreed this month. The cash would be paid to holders of the DUGB 6.45 05/02/22 0.40% DOLNRG 5.888 06/15/19 Shariah-compliant notes, or sukuk, once a lockup agreement between JAFZSK 7 06/19/19 0.40% QATAR 5 1/4 01/20/20 Dana Gas and its creditors is signed, likely later this month. Dana Gas, RAKS 8 07/22/14 DUGB 7 3/4 10/05/20 0.26% ADGB 5 1/2 04/08/14 which didn’t pay the $920 million sukuk when they matured at the end of Monthly Best monthly Performers Worst monthly Performers October, said Nov.7 it had reached a restructuring agreement with its main change noteholders including a partial cash payout. DANAGS 7 1/2 10/31/12 18.83% GOBLT 0 05/15/12 NBB, SIO Hold Talks With Investment Dar on Bahrain Islamic Stake- National Bank of Bahrain and the Social Insurance Organization are in talks with Investment Dar, the Kuwait-based majority owner of Aston Martin Lagonda Ltd., for a potential acquisition of shares in Bahrain Islamic Bank. The talks are at a preliminary stage and a potential acquisition is subject to completion of the due diligence process and regulatory approvals. It didn’t specify the amount of shares. Investment Dar holds a 39.75 percent stake in the Bahraini bank. Investment Dar last year restructured the terms on about $5 billion of loans after defaulting in 2009.

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 NAKHL 10 08/25/16 TAQAUH 6 1/2 10/27/36

Dubai Group Talks Showcase Emirate’s Plunging Risk: Arab Credit- Dubai Group LLC progress in its quest to restructure $6 billion of debt after two years of talks underscores why investor perceptions of the emirate’s credit risk are improving more than twice as much as regional peers. The cost of insuring the emirate’s debt for five years tumbled 199 basis points, or 1.99 percentage points, this year to 246 yesterday, according to data provider CMA. That compares with a 68 basis-point decline in average credit default swaps in the Middle East to 261.

Source: Bloomberg, Markaz Analysis

GCC Utilization of Bond Markets is Growing- There is US$233bn in debt securities issued in the GCC in circulation, equivalent to 17% of the region's GDP. This is a relatively low level compared with advanced economies where government bonds alone often amount to over 100% of GDP. According to analysis by QNB Group, this debt includes US$17bn in central bank T-bills (short-term debt instruments that are generally used to manage domestic liquidity) and US$216bn in longer-term bonds & Sukuks

SAIBOR KIBOR BHIBOR QATAR AEIBOR LIBOR EURIBOR JDIBOR TRLIBOR

Foreign Money Cashes Out as Fitch Sparks Selloff: Turkey CreditForeign investors sold Turkish bonds at the fastest pace in two months a week after Fitch Ratings raised the nation’s debt to investment grade, locking in gains by the best-performing major emerging market this year. International investors cut bond holdings by $364 million in the week ending Nov. 16, the most since Sept. 21, according to central bank data. The securities surged after Fitch upgraded Turkey on Nov. 5 to BBB-, pushing yields on 2 yr benchmark debt down 48 bps for the biggest weekly decrease since January.

5.08% 3.67% 2.43% 2.41% YTD change 40.07% 35.55% 34.16% 32.95% 32.39%

BHRAIN 6.273 11/22/18 QTELQD 3 3/8 10/14/16 ALDAR 10 3/4 05/27/14 DOLNRG 5.888 06/15/19 Worst YTD Performers DAEAVI 11 1/4 08/01/15 TAQAUH 6.6 08/01/13 DUGB 4 02/22/14 ADGB 5 1/2 04/08/14 RAKS 8 07/22/14

Daily change -0.26% -0.19% -0.17% -0.17% -0.17% Monthly change -18.18% -0.95% -0.80% -0.77% -0.69% YTD change -2.44% -2.21% -2.20% -2.01% -1.86%

HSBC/NASDAQ Dubai Middle East US Dollar Sukuk /Bond Index Sukuk 23-Nov-12 31-Dec-11

Total Return 165.329 148.84

Duration Yield 5.006 4.99

Interbank Rates (%)

3-Month 25/11/12 31/12/11 0.9737 0.5188 0.8125 0.5625 1.1917 0.8500 1.2000 0.4300 1.3000 0.9750 0.3115 0.2953 0.1960 0.9643 5.0130 3.8410 6.5596 11.2750

3.59 5.07

Spread 230.756 326.79

Clean Coupon Total Market Cap Price 6.301 105.543 5.36 1523.900 6.80 99.35 5.81 1157.44

Life

6-Month 25/11/12 31/12/11 1.0112 0.7800 1.0625 0.8125 1.5167 1.2583 1.3714 1.1000 1.4713 1.5200 0.5270 0.5810 0.3810 1.2921 5.4470 4.2380 7.0702 11.316

1-Year 25/11/12 31/12/11 1.1287 1.0400 1.3125 1.3125 1.8900 1.9583 1.7071 2.1500 1.6312 1.9725 0.8610 1.1281 0.6070 1.9134 5.9967 5.2000 7.3767 11.3743

U.S. Treasuries 21 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

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-

Morocco Ba1 BBB- BBBJordan

Ba2

BB

NR

China

Aa3 AA-

A+

UK

Aaa AAA

AAA

US

Aaa AA+

AAA

USD 5-Year YTD CDS Change Abu 88.670 -30.9% Dhabi Dubai 244.917 -43.6% Bahrain 208.000 -45.8% Qatar

90.575 -28.5%

Saudi

77.330 -39.1%

Egypt

389.525 -39.2%

Lebanon 427.250 Turkey Iran

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

USD 0.2822 3.7503 0.3770 3.6411 0.3849 3.6730 6.0879 0.7078 1.2743

1-Day ∆ 0.0006 0.0001 0.0001 0.0001 (0.0006) 0.0001 (0.0023) 0.0012 0.0038

1 Year (%) -2.005% 0.003% 0.003% 0.014% 0.018% 1.926% -1.506% 0.085% -3.154%

Ba1

A

9.2%

142.160 -50.5% 33.730 -12.9%

Morocco 245.000 -8.9% China

60.665 -58.5%

France

84.805 -61.6%

Germany 30.280 -70.2% Japan

72.340 -49.5%

UK

31.970 -67.3%

US

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.

DFIU25112012  

DFIU25112012

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