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Anita Yadav - Head of Fixed Income Research
Published Date: 06 September 2018
Market sentiment in the month of August was weak, with sell off in EM assets and trade war concerns the key culprits behind the malaise. Amid low liquidity, US treasuries were boosted higher. UST yields declined across the curve with yields on 2yr, 5yr and 10yr USTs closing the month of August at 2.63% (-5bps m/m), 2.74% (-13bps m/m) and 2.86% (-12bps, m/m) respectively.
Despite the upward push to sukuk trading prices from falling benchmark yields, USD denominated bonds and sukuk failed to maintain prices as credit spreads widened on the back of receding risk appetite. Total return on Emirates NBD Markit iBoxx USD Sukuk index was largely flat during the month owing to the coupon money offsetting the marginal fall in capital prices.
Looking at the trading yields on various sukuk at the end of the month of August, following relative value observations are made:
In the sovereign sector :
Source: Markit, Emirates NBD Research
Relative Value in Global Sukuk
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