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Kuwait Financial Centre “Markaz” GCC Daily Fixed Income Report – 20 May 2012 News Update Select GCC Bond and Sukuk Prices (18 May 2012) IMF Says UAE Government Entities To Repay $30 Bn In 2012Type Name Maturity Size (Mn) Rating Government-related companies in the UAE have to repay $30bn of Bond State of Qatar 9-Apr-14 2,000 AA/Aa2 maturing loans this year and face a "significant" amount of debt falling due Bond State of Qatar 9-Apr-19 1,000 AA/Aa2 Bond Emirate of Abu Dhabi 8-Apr-14 1,500 AA/Aa2 in 2014 and 2015, the IMF said. Several government-related entities are Bond Emirate of Abu Dhabi 8-Apr-19 1,500 AA/Aa2 still restructuring their debts and their "indebtedness, refinancing needs Bond Mubadala Development Co. 6-May-14 1,250 Aa3/Aa2 and reliance on foreign funding remain high." The IMF reiterated that the Bond Mubadala Development Co. 6-May-19 500 Aa3/Aa2 UAE should adopt "further deleveraging and strengthening of impaired GRE Bond Qatar Telecom 10-Jun-14 900 A/A2 balance sheets, increased transparency, and improvements in corporate Bond Qatar Telecom 10-Jun-19 600 A/A2 governance at GREs." Sukuk Aldar Properties 27-May-14 1,500 BB-/B1 UAE GDP Up $62 Bn In 2011- Strong crude prices allied with high oil production by the UAE to boost its nominal GDP by nearly $62bn in 2011 and allow it to maintain its position as the second largest Arab economy. Oil prices averaged a record high of nearly $110 in 2011 while the UAE pumped around 2.6 million barrels per day, one of its highest crude production levels since it began exporting oil five decades ago. Given its heavy reliance on oil exports, higher prices and output expanded the UAE's GDP by $62bn or around 20.8% to push it to a record high of $360bn in 2011 from $298bn in 2010. Dubai Fund Says No Bond Issue This Year- The Investment Corporation of Dubai, the emirate's sovereign wealth arm, has no current plan to issue a bond this year and will likely pay off a $2bn loan that is due next year, the fund's CEO said. 'ICD at the moment does not have any liquidity requirement,' Mohammed al-Shaibani said. 'But our subsidiaries are issuing bonds according to their needs,' he added, referring among others to the Dubai Islamic Bank that is planning to issue a benchmarksized, dollar-denominated sukuk. Shaibani said the ICD was still evaluating options for its $2bn due next year, part of a $6bn loan. The fund paid off the first tranche of $4bn last year. 'We are liquid and we don't think there is requirement, most likely we'll pay it down.' Sukuk Yields At 2-Month High On Treasury Demand- Islamic bond yields rose to a two-month high in their worst weekly performance since January, as Europe’s deficit crisis and China’s slowing economy boosted demand for the relative safety of US debt. Global sukuk yields climbed 11bps to 3.78%, a level last surpassed on Feb. 29, according to the HSBC/Nasdaq Dubai US Dollar Sukuk Index. The premium over US benchmark interest rates widened for a fifth week, the longest stretch since February 2010. Ten-year US Treasury yields reached 1.69%, the least in more than seven months. Investors in the $1 trillion Islamic finance industry say the risk of contagion in Europe may force potential sukuk issuers to delay sales as borrowing costs rise. A stalemate in Greece over forming a united government that backs austerity measures has raised concern the nation will exit the euro, shaving $3.1 trillion off global stock markets since a May 6 election failed.

Sukuk DP World Ltd

2-Jul-17

1,500

Bid Price 106.149 119.649 108.625 123.750 107.525 122.801 108.835 122.689 108.943 BBB-/Baa3 105.102

Ask Price 106.738 120.434 109.000 124.500 108.124 123.768 109.426 123.590 109.622 105.852

Bid Yield 1.804% 3.329% 0.853% 2.912% 1.810% 3.855% 2.069% 4.131% 5.964% 5.101%

Ask Yield 1.497% 3.214% 0.662% 2.806% 1.512% 3.714% 1.790% 4.000% 5.622% 4.938%

HSBC/NASDAQ Dubai GCC Sukuk & Bonds US Dollar Index Sukuk 18-May-12 31-December-11 Conventional 18-May-12 31-December-11

Total Return 137.42 133.00 146.75 141.59

3.89 3.59

4.10 4.31

295.19 312.20

Clean Price 4.44 97.15 3.99 95.79

5.26 5.26

4.60 5.07

299.05 322.59

7.17 7.31

Duration Yield

Spread

Life

Coupon Total Market Cap

100.22 98.53

4.96 5.06

192.47 142.39

5.38 5.63

935.73 808.83

Interbank Rates (%) SAIBOR KIBOR BHIBOR QATAR AEIBOR LIBOR EURIBOR

1-Month 20/05/12 31/12/11 0.5988 0.5188 0.5625 0.5625 0.8400 0.8500 0.8900 0.4300 0.9750 0.9750 0.2398 0.2953 0.3411 0.9643

U.S. Treasuries (18 May 2012) 3-Month 2-Year 3-Year 5-Year 10-Year 30-Year

Coupon 0.000 0.250 0.250 0.875 1.750 3.000

Equity Market Snapshot Abu Dhabi SE Bahrain SE Dubai SE Kuwait SE Muscat SE Qatar SE Saudi SE

Last Close 2,467.21 1,156.31 1,486.36 6,437.72 5,643.61 8,491.32 7,099.90

3-Month 20/05/12 31/12/11 0.9050 0.7800 0.8125 0.8125 1.2640 1.2583 1.3300 1.1000 1.5338 1.5200 0.4669 0.5810 0.6107 1.2921

Price 0.075 99.918 99.523 100.617 100.250 103.906

Price Change -0.018 0.008 -0.020 -0.082 -0.227 -0.391

1 Day Change 0.0% -0.4% -1.4% -0.1% 0.2% -0.3% -1.9%

YTD Change 2.7% 0.7% 8.3% 10.6% -0.7% -3.5% 8.5%

20/05/12 1.1163 1.3125 1.9700 2.3800 1.9813 1.0690 1.2511

1-Year

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

Current Yield (%) Yield Change (%) 0.079 -16.220 0.295 -0.276 0.412 2.068 0.748 2.386 1.723 1.504 2.807 0.701

Crude Oil Brent WTI OPEC

Price 107.14 91.48 107.10

1 Day ∆ -0.33% -1.17% -0.96%

Gold Spot $/OZ

Price 1,592.45

1 Day ∆ 1.19%

GCC Sovereign Ratings Moody’s S&P Abu Aa2 AA Dhabi

Fitch

Bahrain Baa1 BBB

BBB

Kuwait Aa2

AA

AA NR

AA

Oman

A1

A

Qatar

Aa2

AA

NR

KSA

Aa3 AA-

AA-

UAE

Aa2

NR

NR

GCC Currencies Currency

USD 1-Day ∆

KWD

0.2796

0.0000

SAR

3.7503

0.0001

BHD

0.3770

0.0000

QAR

3.6412

0.0000

OMR

0.3845

0.0000

AED

3.6730

0.0000

EUR/USD 1.2780

0.0065

JPY

79.0200 (0.3600)

USD 5-Year CDS Abu Dhabi Dubai

YTD Change

131.625

3.2%

395.620

-11.1%

Bahrain 372.500

-2.8%

Qatar

131.830

3.5%

Saudi

130.000

1.1%

Egypt

655.000

2.4%

Lebanon 467.500

-0.9%

Turkey

277.425

-4.8%

China

138.010

-6.2%

France

223.000

1.4%

Germany 100.500

-1.6%

Japan

111.490

-22.2%

UK

73.500

-24.6%

US

44.500

-9.1%

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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