Transcript Local Debt Monitor

Interest Rate Monitor
May 19, 2013
Brief Overview
International
US: Choppy week for Treasuries; consumer sentiment
added to Fed “tapering talk”
Eurozone: Bonds drop as slump persists into longest
recession for the region
UK: BoE upgrades its UK growth assessment
Japan: Abenomics begins to show impact
China: Recovery remains fragile
Markets overview
Major Indices: Consumer sentiment boosts stocks
Commodities and Currencies: brighter US data and a
stronger dollar put a damper on investor appetite
for safe havens as Gold
Central Bank Meeting Calendar
Interest Rate Forecast
The Week Ahead
MENA Region
Egypt: Unemployment increases in first quarter;
treasury yields continue to rise
GCC News Highlights
GCC interbank rates
Comparative MENA Markets
Local Economy
New and analysis
 Fiscal deficit improves, though picture
remains bleak when we exclude grants
Markets overview
 Amman Stock Exchange
 Local Debt Monitor
 Prime Lending Rates
2
International
3
US Treasury bond rates:
Choppy week for yields after data gave mixed signals
•
•
•
Economic data released over the past week have been a
mixed bag. While weakness was evident in the
manufacturing sector, retail sales surprised on the upside
and consumer sentiment climbed to its highest level in
years.
The strong data bolstered expectations that the Federal
Reserve will be able to start winding down its bond-buying
program this year.
Nevertheless, the back and forth speculation over Fed
“tapering talk” meant US Treasuries had a choppy week.
The 10-year yield rose 7bp on Friday to 1.95%, having risen
to within a whisker of 2% earlier in the week.
As of May 17
1 Month
3 Months
6 Months
2 Years
5 Years
10 Years
30 Years
0.01%
0.04%
0.08%
0.25%
0.83%
1.95%
3.17%
1 Week Ago A Month Ago
0.02%
0.04%
0.08%
0.24%
0.82%
1.90%
3.10%
0.03%
0.06%
0.09%
0.23%
0.70%
1.69%
2.87%
4
US inflation and sentiment,,,
•
The sluggishness of the U.S. economy seems to be keeping a lid on
inflation.
•
Consumer prices fell 0.4% in April, the second straight month of
declines, the Labor Department said Thursday. Over the past year,
prices have risen just 1.7%, omitting food and energy, below the
roughly 2% level that Federal Reserve officials consider healthy for the
economy.
•
While tame inflation is good news for consumers, it also reflects the
considerable slack in the economy. Until the economy starts firing on
more cylinders, with more workers getting jobs and factories ramping
up production, U.S. companies will find it hard to raise prices without
losing customers.
•
The slowing price growth—and the risk of deflation, however small—
gives the Federal Reserve more room to continue its easy-money
policy, designed to boost growth. The Fed could also increase the
amount of bonds it is buying to help push more money into the
economy and perhaps lift inflation toward its target.
•
The biggest factor behind the falling inflation numbers is a persistent
drop in energy prices, including gasoline, which fell in price last month
before stabilizing.
April
1.7%
5
Retail sales surprises on the upside fuelled by cheap gas
•
Lower-priced gas allowed Americans to step up their spending
at retailers in April, from cars and clothes to electronics and
appliances, boosting the economy. The rebound from a weak
March suggests consumers remain resilient in the face of higher
taxes and could continue to drive economic growth this spring.
•
Retail sales edged up 0.1% in April, the Commerce Department
said Monday. That’s an improvement from a 0.5% decline in
March, the largest drop in nine months.
•
The April gain was stronger when taking out the effect of lower
gas prices, which reduced sales at gas stations 4.7%.
•
When excluding gas station sales, retail spending rose 0.7%.
And core retail sales, which exclude gas, autos and building
supplies, increased 0.5%. Economists pay close attention to core
sales because they strip out the most volatile categories.
•
Consumers increased their spending in April, despite paying
higher Social Security taxes that has reduced their paychecks
this year. Their spending likely will add to economic growth in
the April-June quarter. Consumer spending makes up roughly
70% of economic activity.
6
Americans gain confidence in the economy
•
U.S. consumers' view of the economy turned much brighter in
early May, as rising real estate values and record stock prices
boosted household wealth.
•
The Thomson Reuters/University of Michigan preliminary index
of consumer sentiment increased to 83.7, the highest since July
2007, from 76.4 in April, a report today showed.
•
The early-May increase implies consumers are looking past the
drag coming from federal spending cuts. Offsetting that negative
has been rising equity prices, strengthening housing markets and
falling gasoline prices.
•
The strong data, along with signs of continued strong private
consumption, bolstered expectations that the Federal Reserve
will be able to start winding down its bond-buying program this
year, backing away from an exceptionally easy monetary policy
stance that has weighed on the dollar.
•
Markets are focused on when the Fed will begin tapering its
bond purchases, and any sign of improvement in the U.S.
economy adds to expectations that the central bank can begin to
phase out its monetary stimulus program.
7
Mixed data shows weakness in manufacturing and
housing sector
•
On the other hand, weakness is evident in the manufacturing sector, with
manufacturing production growth running at a meager 0.9% annualized rate over the
past three months and the regional PMIs received so far indicate that the weakness
extended into May.
•
Moreover, construction of new homes sank last month far more than expected, a sign of
weakness for a part of the economy that has been in recovery mode.
•
Overall housing starts fell 16.5% in April to a seasonally adjusted annual rate of 853,000,
the Commerce Department said Thursday, primarily due to a big drop in multifamily
construction. The figures were the weakest since November, but still nearly 36% above
the same month last year.
•
Nevertheless, analysts weren't too discouraged by the data, saying that likely
represented temporary fluctuations.
•
One piece of evidence that construction is likely to rebound: The number of new
building permits, an indication of future construction, rose to the highest level since
June 2008. They increased 14.3% to an annualized rate of 1.02 million, in April.
8
US politicians have more room to work on budget deal,
as deficit falls faster than expected
•
Finally, there was good news on the US fiscal situation from the Congressional Budget Office.
•
The budget office sharply cut its estimate of the current fiscal-year deficit by more than $200
billion, on higher-than-anticipated tax receipts and big payments to the Treasury from Fannie
Mae and Freddie Mac, the mortgage financiers.
•
Accordingly, the CBO took down its projected 2013 budget deficit to 4% of GDP and it expects
the deficit to decline to 3.4% in 2014 and to 2.1% in 2015.
•
This will be enough to stabilize government debt to GDP in the next few years and take the
pressure off politicians to implement further fiscal tightening.
•
A side-effect is that the date when the debt ceiling becomes binding is not likely to be reached
until October (prior estimate was mid July), which gives politicians some more time to work on
a budget deal.
•
That has left nothing on the horizon to force Congress’s hand until it needs to raise the debt
ceiling, a statutory borrowing limit. But because of strong tax receipts and the sequestration
spending cuts, it might not need to tackle that issue until October or even later.
9
European yields fall after data shows that eurozone is still
in recession
•
Weak eurozone growth data – and the
possibility of further European Central Bank
easing to stimulate growth – helped push up
German bond prices. The Bund yield ended
the week at 1.31%, down 2 basis points on
the day and 7bp on the week.
•
Meanwhile, persistent strong demand
continues for peripheral bond yields, as
investors show an increased appetite for
bonds that offer a pick-up to low yielding core
rates. Spain pulled in massive demand for the
sale of new 10-year government bonds on
Tuesday.
•
However, the trend is slowing down as the
latest data show that the eurozone crisis
persists.
•
Spain’s 10-year yield dropped to 4.21% Friday,
while Italy’s 10-year yield fell to 3.90%.
10
Eurozone stuck in longest recession
•
Continuing government austerity, banks that can't or won't lend
and heavy household debts are weighing on the eurozone. Weak
business surveys are challenging official predictions, including
from the European Central Bank, that growth will return this year.
•
The euro zone's gross domestic product fell in the first three
months of the year at an annualized rate of 0.9%, data out
Wednesday showed – a fall of 0.2% compared to the previous
quarter.
•
That was the sixth-straight quarter of a recession that began in
late 2011, and puts the region in contrast with other recovering
economies. U.S. GDP grew at a 2.5% pace in the first quarter, and
early Thursday, Japan said its GDP jumped 3.5% in the quarter.
U.K. output rose last quarter as well.
•
Depression-like conditions in Southern Europe, combined with
slowing global growth, are dragging down the core economies:
Germany is barely growing and France is steadily contracting.
11
Eurozone stuck in longest recession
•
The pace of contraction eased in Italy and Spain,
but both economies still shrank at annualized rates
of about 2% in the first quarter.
•
But French GDP contracted at an annualized rate of
0.7%, which was worse than economists had
expected.
•
Germany's economy grew by an annualized 0.3%,
less than expected, adding to doubts about the
ability of Europe's largest economy to provide the
demand that is badly needed to offset shrinking
demand in Mediterranean countries.
•
Germany’s recovery may have been delayed by an
unusually long winter, which damped construction
activity and business confidence, the Bundesbank
has said.
12
Weak demand still plagues the region
•
The trade surplus for the eurozone hit its highest level in March since the bloc was
formed in 1999, driven by a continued decline in imports that reflects very weak
demand at home as well as steadily rising exports.
•
The figures released Thursday indicate that the region's trade surplus increased in
the first quarter as a whole, suggesting that weak demand was also responsible for
the decline in output during the period.
•
Exports rose in March compared with the previous month, the third such increase
in a row, offering some hope for the eurozone as it struggles to escape from its
longest postwar contraction. But compared with the previous year, exports were
merely flat in March while imports were 10% lower.
•
With global demand likely to remain tepid in coming months, strong export growth
will be difficult to sustain, meaning a revival in domestic demand will likely be
required before the eurozone can return to sustained growth.
13
Low inflation could mean another rate cut
•
Eurostat said consumer prices fell 0.1% from March, with
the annual rate of inflation slowing to 1.2% from 1.7% in
March to reach a low last recorded in February 2010.
•
The European Central Bank defines price stability—the
maintenance of which is its sole mission—as an inflation
rate of just below 2%.
•
The prospects of a second consecutive year of recession
in the eurozone and tumbling inflation prompted the
European Central Bank to cut interest rates earlier this
month to a record low of 0.5%, and declare it was ready
to act again if necessary.
•
Accordingly, the continued weakness in domestic demand
suggested by the decline in imports, and the continuing
fall in prices, makes it likely the central bank will have to
act again to stimulate growth.
14
UK economy picking up?
Bank of England upgrades its UK growth assessment
•
The Bank of England said in its quarterly report that the
economy is likely to grow more rapidly than it thought in
February, although the recovery will be weak by historical
standards and vulnerable to threats from abroad, such as the
crisis in the euro zone, the U.K.'s biggest trading partner.
•
Mervyn A. King, in his last scheduled news conference before
retiring from the central bank in July, said the economy would
grow faster and consumer prices would increase slower than
was anticipated in February.
•
Britain’s economy could grow by 0.5% this quarter after
growing 0.3% in the first three months of this year, the Bank
of England said. Inflation could peak at 3.1% toward the end
of the summer, a lower level than had been expected, to fall
below the target from mid-2015, it said.
•
But Mr. King also said it was “no time to be complacent”
because inflation remains above the central bank’s target of 2
percent and the labor market is still weak. Threats to a
sustained recovery continue to come from outside Britain,
especially from the eurozone.
15
But the economy remains fragile, and more stimulus is
expected in the coming months
•
Economists expect the bank to continue pursuing stimulus
in coming months, particularly once Mr. King steps down,
to be replaced by current Bank of Canada Gov. Mark
Carney.
•
Mr. Carney has argued for a new communications strategy
to hammer home the message that the bank doesn't
intend to raise interest rates until the economy has
strengthened appreciably.
•
Data released Wednesday showed a rise in U.K.
unemployment for the third straight month, highlighting
the fragile nature of the recovery.
•
Unemployment as calculated by the International Labor
Organization rose 15,000 to 2.52 million, for a rate of
7.8%.
•
Moreover, Workers' pay growth slowed to the lowest
annual rate on record, undermining prospects of a
sustained rise in consumer spending.
16
Abenomics begins to show impact
•
Japan's economic growth accelerated swiftly at the beginning of this year, the most
concrete sign yet that new stimulus policies sparking life in financial markets are
starting to lift companies and consumers as well.
•
Japan's economy grew at an annual rate of 3.5% in the first three months of 2013,
Japan's Cabinet Office said Thursday, as consumers spent more and exports to the
U.S. picked up, lifted by a weaker yen. The expansion was much quicker than the
2.7% increase expected by analysts.
•
The figures early Thursday marked a sharp improvement from the tepid 1% growth
rate at the end of last year, which followed six months of contraction.
•
Japan's economy had been in a shallow recession as recently as last year, and the
positive data should bolster hopes that the country's economic outlook is
brightening, following the implementation of a set policies dubbed “Abenomics”.
•
Since taking office in late December, Prime Minister Shinzo Abe's government has
implemented a ¥13.1 trillion ($131 billion) spending package and appointed a new
Bank of Japan governor who orchestrated the central bank's plan to pump money
into the economy through massive purchases of government bonds to raise inflation
to 2% in two years.
17
Full impact of “Abenomics” is still yet to come
•
It is, however, too early to call it a turning
point for an economy that has seen
numerous false starts, with analysts
pointing to the fall in capital spending,
which fell 0.7% quarter-on-quarter in the
January-March period.
•
Moreover, we have not yet seen the real
impact from Abenomics as the effect from
a weaker JPY works with a substantial lag
and the latest fiscal easing (mainly
infrastructure spending) will mainly start to
have an impact in Q2.
•
Japanese government bonds edged down
on Thursday and Friday, after the yield on
10-year paper rose sharply over the first
few sessions of the week to 0.92% – its
highest in more than a year.
18
China recovery remains fragile, but so far no severe
deceleration in growth
•
Data published this week were a little softer than expected, but still revealed strong
growth figures. Industrial production and retail sales both accelerated in April, pointing to
overall economic growth of about 7.5% year-on-year. The Chinese economy grew 7.8%
last year.
•
The data released for April suggest that the Chinese recovery remains fragile and has lost
some momentum, although so far it does not look like a severe deceleration in growth.
•
Growth in industrial production (an indicator for GDP) rebounded slightly in April to 9.3%
y/y from 8.9% y/y in March. When looking at the sequential month-on-month trend it
does appear that growth in industrial production eased in April consistent with the softer
manufacturing PMIs.
•
However, leading indicators like M2 money supply and credit growth remained strong.
•
Moreover, retail sales rose 12.8% in April from the same month a year earlier, compared
with 12.6% growth in March.
19
Sentiment data boosts stocks,,,
20
Gold Selloff Deepens; on Track for 26-Month Low
21
Major Interest Rate Forecasts
Rate (%)
Market yield
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q2 2014
(May 17)
United States
US 10-year
1.95
1.85
2.00
2.18
2.38
2.55
2.7
Fed Fund Target Rate
0.25
0.25
0.25
0.25
0.25
0.25
0.25
1.33
1.36
1.52
1.69
1.72
1.87
2.05
0.50
0.50
0.50
0.50
0.50
0.50
0.50
1.88
0.50
1.93
0.50
2.07
0.50
2.18
0.50
2.34
0.50
2.37
0.50
2.48
0.50
Germany
Germnay 10-year
ECB Main Refinancing Rate
United Kingdom
UK 10-year
BoE Bank Rate
Source: Bloomberg
22
The Week Ahead,,,
Economic Data Release Calendar
May 19, 2013 - May 24, 2013
Date
20-May Mon
21-May Tue
22-May Wed
23-May Thu
24-May Fri
Currency Currency / Event
JPY
AUD
GBP
GBP
JPY
JPY
JPY
JPY
EUR
GBP
GBP
USD
USD
USD
USD
CNY
EUR
EUR
EUR
EUR
EUR
GBP
GBP
USD
USD
USD
EUR
USD
USD
JPY
EUR
EUR
EUR
EUR
USD
JPY Machine Tool Orders (YoY)
AUD RBA Policy Meeting - May Minutes
GBP Consumer Price Index (YoY)
GBP Core Consumer Price Index (YoY)
JPY Adjusted Merchandise Trade Balance (Yen)
JPY Merchandise Trade Exports (YoY)
JPY BOJ Kuroda Press Conference After Policy Meeting
JPY Bank of Japan Rate Decision
EUR Euro-Zone Current Account s.a. (euros)
GBP Bank of England Minutes
GBP Retail Sales (YoY)
USD Existing Home Sales
USD Existing Home Sales (MoM)
USD Fed's Bernanke Testifies on Economic Outlook
USD Fed Releases Minutes from Apr 30 - May 1 FOMC Meeting
CNY HSBC Flash Manufacturing PMI
EUR German Purchasing Manager Index Manufacturing
EUR German Purchasing Manager Index Services
EUR Euro-Zone Purchasing Manager Index Manufacturing
EUR Euro-Zone Purchasing Manager Index Services
EUR Euro-Zone Purchasing Manager Index Composite
GBP Gross Domestic Product (YoY) (1Q P)
GBP Index of Services (3Mo3M)
USD Initial Jobless Claims
USD Continuing Claims
USD Markit US PMI Preliminary
EUR Euro-Zone Consumer Confidence
USD New Home Sales
USD New Home Sales (MoM)
JPY Bank of Japan Governor Kuroda speech at Nikkei Conference
EUR German Gross Domestic Product n.s.a. (YoY) (1Q F)
EUR German Gross Domestic Product s.a. (QoQ) (1Q F)
EUR German GfK Consumer Confidence Survey (JUN)
EUR German IFO - Business Climate
USD Durable Goods Orders
GMT
06:00
01:30
08:30
08:30
23:50
23:50
08:00
08:30
08:30
14:00
14:00
14:00
18:00
01:45
07:30
07:30
08:00
08:00
08:00
08:30
08:30
12:30
12:30
12:58
14:00
14:00
14:00
02:55
06:00
06:00
08:00
12:30
Forecast
Previous
-24.10%
2.60%
2.30%
-¥605.8B
5.50
2.80%
2.40%
-¥922.0B
1.10
0.10%
0.10%
16.3B
1.80%
4.99M
1.30%
0.40%
4.92M
-0.60%
50.40
48.50
50.00
47.00
47.20
47.20
0.60%
0.60%
346K
3000K
52.00
-21.80
425K
1.90%
50.40
48.10
49.60
46.70
47.00
46.90
0.60%
0.10%
360K
3009K
-1.40%
0.10%
6.20
104.40
1.70%
-1.40%
0.10%
6.20
104.40
-5.70%
-22.30
417K
1.50%
23
Central Bank Meetings Calendar
Calendar for upcoming meetings of main central banks :
Central Bank
Month
Current Rate
Expected Rate
Decision
US Federal Reserve (FOMC)
June 19
0.25%
0.25%
European Central Bank (ECB)
June 6
0.50%
0.50%
Bank of England (BoE)
June 6
0.50%
0.50%
Bank of Japan (BOJ)
May 21
0.10%
0.10%
Swiss National Bank (SNB)
June 20
0.00%
0.00%
Bank of Canada (BOC)
May 29
1.00%
1.00%
Reserve Bank of Australia (RBA)
June 4
2.75%
2.75%
Reserve Bank of New Zealand (RBNZ)
June 12
2.50%
2.50%
24
Regional
25
Egyptian treasury yields continue to rise
•
Egypt’s government sought bids for 4 billion Egyptian pounds each
for 6 and 12 month treasury bills due to be issued the 21st May but
the auction was cancelled.
•
This indicates that either banks do not have sufficient liquidity to
bid for the full amount auctioned, or that the Central Bank of Egypt
found the rates bid too high and cancelled the auction. This will
reflect negatively on the government’s fiscal budget as well as put
further pressure on the dire economic situation in the country.
Source: Bloomberg
•
The increased pressure is reflected in Egypt’s credit default swaps
as five-year contracts have climbed 47 basis points this month to
630, the highest level in a month, according to data provider CMA.
•
Other factors affecting the CDS’s is Egypt’s inability to secure the
IMF loan to meet its financing needs. Also, Egypt’s credit rating has
been lowered six times at S&P and Moody’s Investors Service since
the uprising that toppled President Hosni Mubarak.
•
However, reports citing an advisor to the finance minister have
emerged from Egypt stating that regulations related to law
governing sales of Islamic bonds (Sukuk) will be presented next
week to specialists in preparation for sale. This should ease
pressure on treasury yields and domestic liquidity as it will open
new sources of fund for the government.
26
Unemployment rate in Egypt up to 13.2%
•
Egypt’s jobless rate climbed 0.2% in the first quarter of 2013
compared to the last quarter of 2012, reaching 13.2% of the
country’s total labor force, according to state-run statistics body
CAPMAS.
•
The government statistics agency attributed the increase to the
slowdown of economic activities.
•
According to CAPMAS, the number of working Egyptians
reached 23.6 million, with the total labor force registering 27.2
million. The number of unemployed increased by 63,000 in Q1
2013.
•
In other news, Egypt’s parliament gave a final approval to revise
upper 25% income tax bracket to include incomes starting at
more than 0.25 million Egyptian pound/year, compared with 10
million pounds previously.
•
This comes despite Egypt’s income from sales tax increased
from 161 billion pounds since July 1, 2012 to today, compared
to 158 billion pounds for the same period last year.
Source: Trading Economics
Source: Bloomberg
27
GCC Economic News Highlights
•
Dubai inflation remains low in April despite jump in rents: Dubai’s
inflation remained muted in April compared to the previous month
despite a jump in rents, as the central bank governor stated inflation
is to stay below 2% in 2013.
•
On a monthly basis, the inflation rate was a mere 0.11% for the
second month in a row. On an annual basis, inflation edged up to a
two year high of 0.9%, compared to 0.6% year-on-year in March.
Source: Bloomberg
•
Saudi April inflation inches up to 4% as food prices rise: Saudi
Arabia's annual inflation rose slightly to 4% in April compared with
3.9% in March on higher food prices, the Central Department for
Statistic and Information said in a statement.
•
The higher inflation was underpinned by food prices which rose 6.2%
year-on-year compared to 5.3% in March. However, the cost of
housing and utilities in April eased to an annual rate of 3%, compared
with 3.1% in March.
•
Saudi Arabia's central bank and the International Monetary Fund have
said they expect inflation in the kingdom to peak at around 4.6% this
year before slowing again by 2014.
Source: Trading Economics
28
GCC Economic News Highlights
•
IMF Says Bahrain’s Growing Debt May Be Unsustainable
by 2018: Bahrain must urgently cut spending or risk
unsustainable public debt as its fiscal deficit widens and oil
prices decline, according to the IMF.
•
According to the IMF, Bahrain needs “gradual fiscal
consolidation” equal to 7.7% of economic output over the
next 6 budget years to contain its government debt at 40%
of GDP. Bahrain’s outstanding debt including interest is
about $11.8 billion, with more than $3 billion due this
year.
•
The nation’s economy may expand 4.2%in 2013, the IMF
said, 2.0% less than the government forecast. Bahrain also
managed a better- than-expected budget deficit of 2.6% in
2012, the fund said.
•
Standard & Poor’s cited improvements in the “political,
economic and fiscal situation” when it revised the
kingdom’s credit outlook to stable from negative in
January.
Source: Bloomberg
29
GCC Economic News Highlights
•
Fitch affirms ratings for 7 Qatari banks; outlook stable: Global credit rating
agency Fitch has affirmed its ratings on seven Qatari lenders with “stable”
outlook.
•
Fitch’s view of support is based on a strong history of sovereign support from
the central bank including measures to boost capital, as well as asset purchases,
as clearly demonstrated in recent years.
•
These strengths are counterbalanced by continued risk with respect to
concentrations on both sides of the balance sheet, deteriorating restructured
and past due loans at some banks, rapid credit growth and dependency on
government-related spending and Qatar’s undiversified economy.
•
Moody's downgrades Kuwait Finance House long term ratings to A1 from Aa3,
outlook negative.
•
The rating actions reflect continued asset quality pressures, an increasing
reliance on volatile investment income, and the current organizational
complexity and overall risk profile inconsistent with global peers.
•
The ratings could be further downgraded as a result of deterioration of asset
quality metrics, weakening of its retail franchise, weakening of capital position,
and problems resulting from, or failure of, the restructuring exercise.
30
GCC interbank rates
Source: Bloomberg
31
Comparative MENA Markets
For the period 12/05 – 17/05
32
Local
33
Fiscal deficit after grants narrowed, though outlook before grants
remains negative
•
•
In the first two months of the year, the
government recorded a deficit after grants of
JD19.1 million compared to JD39.8 million over
the same period last year.
This positive development is a result of
increasing foreign grants by 183.3 million and
decreasing domestic revenues by around JD
39.5 million.
JD Million
Total Revenues and Grants
Domestic Revenue
Foreign Grants
Total Expenditures
Current Expenditures
Capital Expenditures
Fiscal Deficit/Surplus Including
Grants
Fiscal Deficit/Surplus Excluding
Grants
February
2013
863.9
680.6
183.3
883.0
842.8
40.2
February
2012
720.1
720.1
0.0
759.9
740.7
19.2
-19.1
-39.8
-202.4
-39.8
2012
Preliminary
5,054.4
4,727.3
327.1
6,862.1
6,186.2
675.9
-1,807.7
(-8.2% of GDP)
-2,134.8
(-9.7% of GDP)
Source: Government Budget Office
•
Moreover, both current and capital
expenditures increased, with the increase in
current expenditure stems mainly from an
increase in military spending and interest
payments.
•
Therefore, looking at the fiscal deficit before
grants will show that the deficit increased
during the first two months of the year to
reach JD202 million, compared to JD40 million
the previous year.
34
Shift from internal to external borrowing
•
•
Public Debt reached around JD 16.7 billion
by the end of February 2013, around 69.7%
of 2013 GDP according to our calculations,
increasing by JD145 million during the year.
Domestic debt decreased by around JD
143.7 million during the first two months
of the year, compared to the end of 2012,
while external debt increased by 288
million JD.
•
By not borrowing internally, the
government will ease pressure on JOD
liquidity, and by borrowing externally, the
government will boost foreign reserves and
inject new JOD in the market.
•
The figures reflect the shift in the
government’s policy towards external debt
this year:
JD Million
External Debt
Percent of GDP
Internal Debt
Percent of GDP
Public Debt
Percent of GDP
February
2013
2012
2011
5,220.4
4,932.4
4,486.8
22.3%
22.5%
21.9%
11,505.0
11,648.0
8,915.0
48.1%
52.7%
43.5%
16,725.0
16,581.0
13,401.8
69.7%
75.5%
65.4%
35
Amman Stock Exchange
For the period 12/05 – 16/05
ASE free float shares’ price index ended the week at (2017.7)
points, compared to (2031.2) points for the last week,
posting a decrease of 0.66%. The total trading volume
during the week reached JD(53.1) million compared to
JD(39.9) million during the last week. Trading a total of
(54.4) million shares through (24,868) transactions
The shares of (169) companies were traded, the shares
prices of (48) companies rose, and the shares prices of (81)
declined.
Top 5 losers for the last week
Top 5 gainers for the last week
Stock
% chg
Stock
% chg
Sura Development & Investment Plc
18.18%
Industrial Industries & Match/jimco
(78.75%)
The Investors And Eastern Arab For Industrial And Real Estate
Investments
16.67%
Al-safweh For Financial Investments Co.
(30.97%)
Akary For Industries And Real Estate Investments
13.96%
United Arab Investors
(20.00%)
South Electronics
11.11%
Jordan Poultry Processing & Marketing
(20.00%)
Ubour Logistic Services Plc
10.71%
Int'l Arabian Development And Investment Trading Co.
(13.58%)
36
Local Debt Monitor
Latest T-Bills

As of May 19, the volume of excess reserves, including the overnight window deposits held at the CBJ
JD(2,658) million.
3 months T-Bills
Issue Date
Maturity Date
Size - million
Yield (%)
29/2011
14/12/2011
14/03/2012
50
2.898%
28/2011
12/12/2011
12/03/2012
50
2.844%
6 months T-Bills
Issue Date
Maturity Date
Size - million
Yield (%)
02/2012
14/02/2012
14/08/2012
50
3.788%
01/2012
23/01/2012
23/01/2012
50
3.433%
27/2011
08/12/2011
08/06/2012
50
3.232%
9 months T-Bills
Issue Date
Maturity Date
Size - million
Yield (%)
05/2012
04/03/2012
04/12/2012
75
4.285%
04/2012
29/02/2012
29/11/2012
75
4.229%
03/2012
22/02/2012
22/11/2012
75
4.169%
1 year T-Bills
Issue Date
Maturity Date
Size - Million
Coupon (%)
04/2013
15/04/2013
15/04/2014
75
5.345%
03/2013
26/02/2013
26/02/2014
70
6.750%
02/2013
14/02/2013
14/02/2014
50
6.750%
01/2013
27/01/2013
27/01/2014
70
6.750%
37
Local Debt Monitor
Latest T-Bonds Issues
2 years T-Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
T2613
28/04/2013
28/04/2015
50
6.039%
T2213
10/04/2013
10/04/2015
75
6.604%
T2113
08/04/2013
08/04/2015
50
6.788%
3 years T-Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
T2913
15/05/2013
15/05/2016
50
6.511%
T2713
30/04/2013
30/04/2016
75
6.523%
T2313
17/04/2013
17/04/2016
75
6.980%
4 year T-Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
T0312
15/01/2012
15/01/2016
37.5
7.246%
T4211
16/11/2011
16/11/2015
50
6.475%
5 years T-Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
T2813
08/05/2018
08/05/2018
50
7.474%
T2513
24/04/2013
14/04/2018
75
7.585%
Public Utility Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
PB56 (Water Authority)
12/05/2013
12/05/2016
30
6.662%
PB005 (Housing & Urban Development)
29/07/2012
29/07/2015
20
7.966%
PBO12 (National Electricity)
26/04/2012
26/04/2017
150
7.724%
38
Prime Lending Rates
39
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
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
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40