Transcript Interest Rate Monitor March 31, 2013

Interest Rate Monitor
March 31, 2013
Brief Overview
International
US: Consumer data support sturdy first quarter
growth picture
Eurozone: Tough week as Cyprus deal was hatched
out
UK: Service sector growth sustained
Japan: Long way to meet 2% inflation target
OECD: Gloomy recovery for eurozone; monetary
stimulus remains necessary
Markets overview
MENA Region
Egypt: Budget deficit widens and borrowing
costs increase
GCC News Highlights
GCC interbank rates
Comparative MENA Markets
Local Economy
New and analysis
Major Indices: Stocks climbed after difficult week
 Interest Rate Forecasts
Commodities and Currencies: Euro fluctuates slightly
amid continued tensions regarding Cyprus
 Interest rates drop, though it seems that 3year yields are likely to stabilize
Central Bank Meeting Calendar
Markets overview
Interest Rate Forecast
The Week Ahead
 Amman Stock Exchange
 Local Debt Monitor
 Prime Lending Rates
2
International
3
US Treasury bond rates
•
Americans saw bigger paychecks and stepped up their
spending last month, despite higher taxes and gas
prices, boosting the economy's growth outlook for the
first quarter.
•
However, high uncertainty and weak indicators in the
eurozone, are still fueling demand for US treasuries.
•
The yield on the 10-year Treasury was down 7bp over
the week , ending Thursday at 1.85%.
As of March 30
1 Month
3 Months
6 Months
2 Years
5 Years
10 Years
30 Years
0.04%
0.07%
0.11%
0.25%
0.77%
1.85%
3.10%
1 Week Ago A Month Ago
0.07%
0.07%
0.11%
0.25%
0.80%
1.92%
3.14%
0.07%
0.11%
0.13%
0.24%
0.77%
1.89%
3.09%
4
Consumer spending rises the most in five months.
•
Consumer spending in the US climbed in February by the
most in five months and confidence unexpectedly improved
in March, showing job-market gains are helping Americans
overcome tax increases and concern about federal budget
cuts.
•
Consumer spending, which account for about 70% of the
economy, rose 0.7% after a 0.4% advance the prior month
that was bigger than previously estimated, according to
Commerce Department data Friday.
•
The gain was the largest since September and prompted
several economists to revise upward their growth estimates
for the first quarter of 2013.
•
The economy grew at a 0.4% annual rate in the fourth
quarter, following a 3.1% gain in the previous three months,
revised figures showed Thursday.. The fourth-quarter
slowdown was due to the biggest slump in military spending
since 1972 and slower inventory building. Consumer
purchases rose at a 1.8% rate, revised down from a prior
estimate of 2.1%.
5
Consumer sentiment advanced to a four-month high
•
Record stock prices and rising home values combined with gains in
wages are helping households repair finances left in shreds by the
recession, making it easier to cope with a two percentage-point
increase in the payroll tax.
•
The Commerce Department’s report showed incomes increased 1.1%.
The gain in February followed a 3.7% drop the prior month that
reflected, in part, the higher payroll tax rate.
•
Moreover, confidence among U.S. consumers unexpectedly increased
in March from the prior month as Americans grew more optimistic
about the outlook for the economy.
•
The Thomson Reuters/University of Michigan sentiment index
advanced to a four-month high of 78.6, exceeding estimates, from 77.6
in February.
•
Americans are finding relief in lower gasoline prices, a rally in the stock
market and housing’s recovery, helping alleviate concern about federal
spending cuts.
•
However, some near-term slowdown in consumption could still be in
the card as tax rise plays its effect along with the spending cuts coming
through the sequester.
6
Another round of strong US data
•
A report this week showed home prices in 20 U.S. cities jumped 8.1% in
the 12 months ended in January, the biggest year-over-year gain since
June 2006, , indicating the US housing market strengthened at the
beginning of the year. The S&P/Case- Shiller index of property values
climbed 1% from December.
•
Moreover, durable goods orders came out higher than expected.
Demand for long-lasting U.S. manufactured goods surged in February,
suggesting factory activity continued to expand at a moderate pace.
•
Durable goods orders jumped 5.7% as demand for transportation
equipment rebounded strongly, the Commerce Department said on
Tuesday. The rise last month in durable goods orders, which range from
toasters to aircraft, reversed January's 3.8% plunge.
•
Excluding transportation, orders slipped 0.5% after increasing 2.9% in
January.
•
Though the report was mixed, it was in line with other data, including
industrial production and the Institute for Supply Management's survey
of national factory activity, that have shown a steady growth pace in
manufacturing.
7
Tension remain amid Cypriot and Italian uncertainty
•
Uncertainty remains as European officials have
worked hard this week to stress that Cyprus’s
bailout was a unique case - after a suggestion by
Eurogroup chairman Jeroen Dijsselbloem that
the rescue would serve as a model for future
crises rattled European financial markets.
•
The yield on 10-year Spanish debt rose back
above 5% while Italian borrowing costs climbed
more than 20bp.
•
Italy’s political gridlock in the wake of last
month’s inconclusive election heightened the
sense of uncertainty as efforts by Pier Luigi
Bersani, the leader of the centre-left Democrats,
to form a minority administration looked
increasingly doomed to failure. Mr Bersani said
on Thursday evening that his week of
consultations had “not found a solution”.
•
The tension regarding the eurozone also helped
bolster demand for highly rated German 10year bonds. The bund yield fell 10bp over the
week to 1.28%, near a 7-month low.
8
Cyprus reaches bailout deal, avoiding financial collapse
and possible exit from the eurozone
•
After months of negotiations, Cyprus signed up Monday
for a bailout from its eurozone partners, backed by the
International Monetary Fund, worth nearly 60% of gross
domestic product.
•
In return, Cyprus committed to raise billions from big
depositors to fund the winding down of Popular Bank and
to recapitalize Bank of Cyprus. The EU wants Cyprus to
shrink its banking industry to average size by 2018, which
means shedding about half its assets.
•
Deposits above €100,000 have been frozen at both big
banks. They could be wiped out entirely at Popular, while
at Bank of Cyprus about 40% will be converted into equity.
•
All deposits of less than €100,000 are guaranteed. And the
bailout does not affect smaller banks in Cyprus, which
account for about 60% of the country's total deposits of
€68 billion.
•
Many of those deposits belong to foreign investors, in
particular Russians, and Cypriot authorities fear an
uncontrolled flight of capital that would cause the
economy to implode.
9
Central Bank details losses at Bank of Cyprus with
losses up to 60%
•
On Saturday, Cyprus's central bank spelled out the financial damage to big
deposit holders at Bank of Cyprus PCL, the country's biggest lender, saying
they will lose almost 40% of their deposits as a result of a sweeping
restructuring of the lender.
•
In a statement Saturday, Cyprus's central bank said that 37.5% of all deposits
over €100,000 will immediately be converted into a special class of shares at
the lender as part of its recapitalization plan.
•
Losses could grow even steeper in the months ahead. In a second raid on
these accounts, depositors also could lose up to 22.5% more, depending on
what experts determine is needed to prop up the bank's reserves. The
experts will have 90 days to figure that out.
•
The remaining 40% of big deposits at the Bank of Cyprus will be "temporarily
frozen for liquidity reasons," but continue to accrue existing levels of
interest plus another 10%, the central bank said.
•
Thus, overall big depositors at Cyprus' largest bank may be forced to accept
losses of up to 60%, far more than initially estimated under the European
rescue package to save the country from bankruptcy.
The toughening of the terms sends a clear signal that the bailout means the
end of Cyprus as a hub for offshore finance and could accelerate economic
decline on the island and bring steeper job losses.
•
10
Cyprus banks reopen with tough cash limits, though
there was no panic
•
Banks reopened to relative calm on Thursday for the first time in nearly two weeks after
the imposition of the first capital controls the euro has seen since it was launched a
decade ago. The use of controls breaks new ground for the EU, which is founded on the
principle of free movement of capital and payments.
•
The controls will initially be in force for seven days, according to a statement from the
Finance Ministry, though they are likely to be reviewed on a daily basis and will be
renewed as long as deemed necessary.
•
Cyprus has banned the early withdrawal of funds on term deposits and transfers of more
than €5,000 abroad, unless approved for trade purposes. Checks can be paid into
accounts but not cashed, and a daily withdrawal limit of €300 euros has been set.
•
Credit and debit card use abroad has been limited to €5,000 per month, and people
leaving Cyprus can only take €3,000 in cash each trip.
•
Data from the Central Bank of Cyprus published on Thursday showed that savers from
other eurozone countries withdrew 18% of the cash they held in Cyprus, or €860m, in
February but deposits from non-eurozone countries rose fractionally to €42.6bn. Overall,
deposits were down almost €1bn to €67.5bn.
11
Cyprus faces steep job losses and a prolonged and deep
recession
•
Cypriot President Nicos Anastasiades said on Friday
that the €10 billion bailout had contained the risk of
national bankruptcy and would prevent it from leaving
the euro.
•
However, even if it manages to stabilize the banking
system and relax controls, Cyprus faces years of
hardship as the shrinking of one of its main service
industries plunges the economy even deeper into
recession.
•
A sharp contraction in Cypriot GDP of around 10% to
20% is likely in 2013-14 with only a weak recovery
thereafter.
•
Development of natural gas deposits discovered
offshore may ease the pain, but they're unlikely to
begin generating significant revenue for several years.
12
Spain’s fiscal deficit larger than expected as the Central
Bank sees deeper recession
•
Spain’s economy will sink deeper into recession this year, the Bank of Spain
said Tuesday, sending a stark message to the Government as it prepares to
revise its own growth forecast.
•
In its annual update of economic forecasts, the Central Bank said it saw
Spain’s economy shrinking by 1.5% in 2013, following a 1.4% contraction last
year as austerity continues to exacerbate the effects of a burst property
bubble.
•
The Central Bank’s new estimate is well below the official forecast for a 0.5%
contraction in GDP, although the Government is widely expected to revise
the 2013 figure downwards in April.
•
Moreover, the Spanish government said its 2012 budget deficit will be bigger
than first estimated after the European Union requested changes in how tax
claims are computed.
•
The budget shortfall excluding aid to the banking sector was 6.98% of GDP
last year, more than the 6.74% predicted on Feb. 28, Deputy Budget Minister
Marta Fernandez Curras told reporters in Madrid today. That compares with
8.96% in 2011.
•
Spain is seeking an extension from other euro-region governments to reorder
its public finances as Prime Minister Mariano Rajoy says output may shrink
more in 2013 than initially predicted.
13
UK services sector sees growth
•
The U.K.'s dominant services sector expanded in January at
its fastest pace since August, but with other parts of the
economy contracting sharply, that may not be enough to
stave off Britain's third recession in five years.
•
The U.K. index of services rose 0.3% on the month and 0.8%
on the year, the Office for National Statistics said. That is the
fastest monthly rate of growth since August.
•
The ONS said the rise in services-sector output was driven by
business services, finance and government services.
•
Services account for more than three-quarters of U.K. gross
domestic product and their performance in the first three
months of 2013 will be crucial to determining whether the
economy sinks back into recession.
•
The U.K. economy shrank in the final three months of 2012.
The first estimate of first-quarter gross domestic product will
be published April 25.
•
Following falls in industrial production and construction in
January, economists said the services sector would need to
deliver a strong performance to reduce the risk of another
downturn.
14
Japan still has a long way to meet 2% inflation target
•
Japan's consumer prices fell for the fourth consecutive month in
February highlighting how challenging it could be for the central bank
to achieve its 2% inflation target, which analysts say is unlikely at least
over the next two years.
•
Japan’s consumer prices fell 0.7% in February from a year earlier.
Meanwhile, core consumer prices, which exclude fresh food but
include energy, fell 0.3% in February from a year earlier - a fourth
straight month of declines.
•
The world's third biggest economy, has been battling deflation for
nearly two decades amid poor growth and a strong currency.
•
But expectations of a turnaround in consumer prices have been rising
with the new governor of the Bank of Japan (BoJ) Haruhiko Kuroda
vowing to use all means available to achieve a target of 2% inflation in
two years.
•
This has led to wide speculation that the central bank would expand
stimulus measures at its next policy-setting meeting on April 3-4 to try
to spur price growth.
•
On Thursday, BoJ governor repeated a pledge to consider extending
the maturity of bond purchases. Japan’s gross debt to GDP ratio is
expected to top 246% this year, according to IMF estimates.
15
OECD: Gloomy recovery for eurozone continues
•
The Organization for Economic Co-Operation and
Development said on Thursday, in its latest
Interim Economic Assessment, that growth is
struggling particularly in the eurozone, where the
OECD expects France and Italy to have contracted
in the first three months of 2013. Italy will
continue to contract through to the end of June,
the limit of the OECD forecasts.
•
Stronger growth in Germany will help the three
largest economies using the euro to expand as a
group, but only slowly, with 0.4% annualized
gross domestic product growth in the first quarter
and 1.2% in the second, the OECD said. U.K.
growth will be similarly weak at 0.3% and 1.3%
over same period.
•
The U.S., by contrast, will grow 3.5% and 2% in
the first and second quarters, and Japan 3.2% and
2.2%, according to the forecasts.
•
Emerging economies are even further ahead—
annualized growth in China will be well above 8%
throughout the first half of 2013, the OECD said.
16
OECD: Monetary stimulus remains necessary
•
The OECD states that downside risks
remains, though less pronounced that 6
months ago. These include the euro area
recession and financial system fragility and
fiscal deadlock in the U.S.
•
Moreover, the OECD notes that financial
markets are out-pacing real activity, which
has been held back by weak business and
consumer confidence, and highlights the risk
that asset prices may rise beyond levels
justified by fundamentals.
•
Nevertheless, central banks should maintain
or strengthen expansionary monetary policy
to support their economies, but need to vary
across countries.
•
Low inflation in most major economies
means exceptional measures can and should
remain in place, or be pursued further, it
said.
17
Stocks climbed after difficult week
S&P 500 managed to set a fresh record closing high
18
Euro had a tough week amid Cypriot and Italian tensions
19
Major Interest Rate Forecasts
Market yield
(March 30)
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
US 10-year
1.85
1.87
1.98
2.14
2.31
2.48
2.62
Fed Fund Target Rate
0.25
0.25
0.25
0.25
0.25
0.25
0.25
1.29
1.47
1.62
1.78
1.91
2.01
2.09
0.75
0.75
0.75
0.75
0.75
0.75
0.75
1.77
0.50
2.02
0.50
2.08
0.50
2.21
0.50
2.34
0.50
2.45
0.50
2.51
0.50
Rate (%)
United States
Germany
Germnay 10-year
ECB Main Refinancing Rate
United Kingdom
UK 10-year
BoE Bank Rate
Source: Bloomberg
20
The Week Ahead,,,
Economic Data Release Calendar
March 31, 2013 - April 5, 2013
Date
1-Apr Mon
2-Apr Tue
3-Apr Wed
4-Apr Thu
5-Apr Fri
Currency Event
CNY
CNY
USD
USD
AUD
EUR
EUR
GBP
EUR
EUR
EUR
USD
AUD
CNY
CNY
GBP
EUR
USD
USD
JPY
EUR
EUR
EUR
GBP
EUR
GBP
GBP
EUR
JPY
EUR
EUR
CAD
USD
USD
CNY Manufacturing PMI
CNY HSBC Manufacturing PMI
USD Markit US PMI Final
USD ISM Manufacturing
AUD Reserve Bank of Australia Rate Decision
EUR German Purchasing Manager Index Manufacturing
EUR Euro-Zone Purchasing Manager Index Manufacturing
GBP Purchasing Manager Index Manufacturing
EUR Euro-Zone Unemployment Rate
EUR German Consumer Price Index (YoY)
EUR German Consumer Price Index - EU Harmonised (YoY)
USD Factory Orders
AUD Trade Balance (Australian dollar)
CNY Non-manufacturing PMI
CNY HSBC Services PMI
GBP Purchasing Manager Index Construction
EUR Euro-Zone Consumer Price Index Estimate (YoY)
USD ADP Employment Change
USD ISM Non-Manufacutring Composite
JPY Bank of Japan Rate Decision
EUR German Purchasing Manager Index Services
EUR Euro-Zone Purchasing Manager Index Services
EUR Euro-Zone Purchasing Manager Index Composite
GBP Purchasing Manager Index Services
EUR Euro-Zone Producer Price Index (YoY)
GBP Bank of England Rate Decision
GBP BOE Asset Purchase Target
EUR European Central Bank Rate Decision
JPY Bank of Japan's Monthly Economic Report for April (Table)
EUR Euro-Zone Retail Sales (YoY)
EUR German Factory Orders n.s.a. (YoY)
CAD Unemployment Rate
USD Change in Non-farm Payrolls
USD Unemployment Rate
GMT
Forecast
Previous
01:00
01:45
12:58
14:00
03:30
07:55
08:00
08:30
09:00
12:00
12:00
14:00
00:30
01:00
01:45
08:30
09:00
12:15
14:00
51.20
51.50
55.20
54.20
3.00%
48.90
46.60
48.80
12.00%
1.30%
1.70%
2.50%
-1000M
50.10
50.40
07:55
08:00
08:00
08:30
09:00
11:00
11:00
11:45
05:00
09:00
10:00
12:30
12:30
12:30
47.80
1.60%
198K
56.00
0.10%
51.60
46.50
46.50
51.50
1.40%
0.50%
375B
0.75%
54.20
3.00%
48.90
46.60
47.90
11.90%
1.50%
1.80%
-2.00%
-1057M
54.50
52.10
46.80
1.80%
198K
56.00
0.10%
51.60
46.50
46.50
51.80
1.90%
0.50%
375B
0.75%
-1.30%
-1.50%
7.00%
190K
7.70%
-1.30%
-2.50%
7.00%
236K
7.70%
21
Central Bank Meetings Calendar
Calendar for upcoming meetings of main central banks :
Current
Rate
Expected Rate
Decision
May 1
0.25%
0.25%
European Central Bank (ECB)
April 4
0.75%
0.75%
Bank of England (BoE)
April 4
0.50%
0.50%
Bank of Japan (BOJ)
April 3
0.10%
0.10%
Swiss National Bank (SNB)
June 20
0.00%
0.00%
Bank of Canada (BOC)
April 17
1.00%
1.00%
Reserve Bank of Australia (RBA)
April 3
3.00%
3.00%
Reserve Bank of New Zealand (RBNZ)
April 23
2.50%
2.50%
Central Bank
Month
US Federal Reserve (FOMC)
22
Regional
23
Egypt’s Budget Deficit Widens
•
According to a report released by the Egyptian Ministry of
Finance, Egypt’s national budget deficit soared to LE146.5
billion ($21.5 billion) from July 2012 to February 2013, a
rise that is equivalent to 8.2% of the country’s GDP. The
same period last year saw a the deficit widen to LE94.7
billion.
•
However, foreign debt increased by 15.2%, reaching a
record $38.8 billion by the end of December 2012, the
highest increase since March 2008.
•
Previously, the country sought to bridge the budget
deficit by borrowing from international financial
institutions, including the IMF and the World Bank.
•
However, since they were not able to reach an
agreement, latest reports signal that Egypt is calling in
diplomatic favors (especially from Arab countries) or seek
easy payment terms from suppliers who hope for future
advantage in return as it has hit a breaking point in its
ability to pay for imports of oil, wheat and other basic
commodities.
Source: Egypt’s Ministry of Finance
24
Egypt’s Domestic Borrowing Costs Surge
•
Egypt has not received a crude oil cargo from open market
suppliers since January and, with money tight, the state grain
buyer has not purchased wheat since February. The credit
crisis is now so acute that Egypt can no longer buy crude in
the market, leaving its oil minister scrambling to cut
diplomatic deals with Libya, Qatar and Iraq, to add to an
existing oil lifeline from Kuwait.
•
As an initial plan, Libya plans to supply 1 million barrels of oil
a month to Egypt on credit, Libya's deputy oil minister said
Wednesday, as a way to resolve Egypt’s economic crisis. This
is part of an aid lifeline that includes a $2 billion cash deposit.
•
Due to the Egyptian government being low on funds, Egypt’s
local-currency borrowing costs surged the most in three
months. Average yields on six-month and one-year treasury
bills jumped 78bp at the last auction, to reach 13.81% and
14.46% respectively.
•
Moody’s cut deposit ratings of Egypt’s three biggest banks to
Caa1, citing that the government has “reduced capacity to
support” them. National Bank of Egypt SAE, Banque Misr SAE
and Banque Du Caire SAE hold government securities equal to
800% to 900% of their Tier 1 Capital, Moody’s estimates
show.
Source: Bloomberg
Source: Bloomberg
25
GCC Economic News Highlights
•
Mideast Banks Record Single Digit Revenue Growth In 2012: According
to a new study by The Boston Consulting Gro-up (BCG), the banking
industry in the Middle East settled at single digit revenue growth in
2012 with a 6.9% increase. The increase in profits was slightly higher at
8.1%, stemming largely from extraordinary income sources. While banks
in Qatar grew revenues by 12% and banks in Saudi Arabia and Oman
achieved high single digit growth rates, banks in the UAE, Kuwait and
Bahrain achieved a revenue growth rate of 5%or below.
•
Kuwait Surplus Soars on High Oil Price: Kuwait posted a record
provisional budget surplus of 17.2 billion dinars ($60.2 billion) in the first
10 months of the fiscal year on high oil price, government data showed
Wednesday. The surplus up to the end of January was achieved on the
back of a huge income of KWD27 billion and a low spending of KWD9.8
billion.
•
UAE Central Bank agrees on mortgage caps: The United Arab Emirates
central bank has given initial approval to a proposal by the country’s
commercial banks on setting limits for residential mortgage loans, Al
Khaleej newspaper quoted an unnamed banking source as saying on
Thursday. Last month, the local banking association proposed that
lending for first homes be capped at 80% of the home’s value for UAE
nationals and 75% for expatriates. This is expected to slowdown the
rapid growth in the real estate market in the UAE.
26
GCC Economic News Highlights
•
UAE economy to grow 3.3% in 2013: High public spending due to
strong oil prices will ally with the UAE s position as a safe haven
for investments to boost the country s economy by 3.3% in 2013
despite lower crude output, a key Saudi bank has said. The UAE’s
real GDP rose by around 9.4% in 2011 and 2.4% in 2012 and
growth is likely to remain relatively high this year while its fiscal
system will continue to record large surpluses.
•
Saudi nonoil sector growth to remain above 7% in 2013: Saudi
Arabia's real GDP growth is expected to rise by 3% in real terms,
driven by the vibrant nonoil sector that will offset the decline in
oil production. Growth in the nonoil sector will remain above the
7% threshold in 2013.
The Kingdom's real nonoil GDP in 2012 grew by around 7.2
percent, which is higher than the 10-year average of 4.7 percent,
largely driven by the stellar performance of the nonoil private
sector.
The main drivers of private sector growth were the construction,
manufacturing, and the retail sectors, which posted 10.3 percent,
8.3 percent and 8.3 percent annual growth, respectively.
Construction and manufacturing will remain the key beneficiaries
in 2013, growing at 10.5% and 8.5%, respectively.
27
GCC new highlights
Qatar economy grew 6.2% in 2012, 6.6% in last quarter
•
Qatar’s rate of economic growth more than halved last
year to 6.2 percent as a surge in global oil prices abated,
but its construction, finance and manufacturing sectors
expanded by a around a third and should grow again this
year.
•
Output in mining and quarrying, which includes oil and
gas and accounts for almost half of the Arab Gulf state’s
GDP, rose only 1.7 percent last year following a surge in
oil prices which drove the economy overall to 13 percent
growth in 2011, the country’s statistics authority said.
•
But the construction and finance sectors, which each
account for more than a tenth of GDP, both grew by 34
percent, while manufacturing expanded by 28 percent.
•
Quarterly growth in the fourth quarter slowed to 0.1
percent from the 1.7 percent rise in the third quarter,
the statistics authority said, but was still 6.6 percent
year-on-year.
28
GCC Interbank Rates
GCC Interbank Rates (%)
2.0%
Qatar (QIBOR)
UAE (EIBOR)
Saudi Arabia (SAIBOR)
Bahrain (BHIBOR)
Kuwait (KIBOR)
1.8%
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
1M
3M
6M
12M
29
Comparative MENA Markets
For the period 24/03 – 28/03
30
Locally
31
Local interest rates forecasts and major developments
Rate (%)
Jordan
2-year Treasury
Market yield
(March 31)
Q1 2013
Q2 2013
Q3 2013
Q4 2013
7.95
7.95
7.25
7.50
7.75
Previous forecast
Window Rate
7.95
4.00
7.95
4.00
7.55
4.00
7.75
4.00
8.00
4.00
Source: CAB forecasts
•
Our interest rate forecast for 2 years
government bonds was revised lower
mainly due to higher JD liquidity in the
market, and expectations of receiving the
second tranche of the IMF loan in April.
•
Moreover, the US guarantee for Jordan’s
Eurobonds will make it more likely that
the government of Jordan will redeem
part of its domestic debt through 2013.
•
No benchmark interest rates hikes are
expected in 2013.
32
3-year yields on the path of stabilization
•
During this month, the yield on 3year government bonds fell by
0.83% to 7.77% from 8.60%,
supported by high coverage ratio
above 2.
•
The drop in 3-year government
bond yields and increasing
coverage ratios signals more
room for interest rates to go
down.
•
However, in the last auction
coverage ratio started to go
down slightly which might
indicate that 3-year yields will
stabilize in the short-term at
current rates.
33
Amman Stock Exchange
For the period 24/03 – 28/03
ASE free float shares’ price index ended the week at (2088.9)
points, compared to (2089.9) points for the last week,
posting a decrease of 0.05%. The total trading volume
during the week reached JD(92.2) million compared to
JD(136.1) million during the last week. Trading a total of
(90.4) million shares through (35,397) transactions
The shares of (176) companies were traded, the shares
prices of (70) companies rose, and the shares prices of (68)
declined.
Top 5 losers for the last week
Top 5 gainers for the last week
Stock
% chg
Stock
% chg
Transport& Investment Barter Company
26.00%
International Ceramic Industries
(13.64%)
Northern Cement Co.
25.38%
Universal Chemical Industries
(12.63%)
Philadelphia Pharmaceeuticals
24.74%
Sura Development & Investment Plc
(10.00%)
Ad-dulayl Industrial Park & Real Estate Company P.l.c
24.39%
Al-manara Insurance Plc.co.
(9.52%)
Shira Real Estate Development & Investments
22.86%
Jordan Investment & Tourism Transport(alfa)
(9.00%)
34
Local Debt Monitor
Latest T-Bills

As March 31, the volume of excess reserves, including the overnight window deposits held at the CBJ
JD(2,348) 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 (%)
03/2013
26/02/2012
26/02/2014
70
6.750%
02/2013
14/02/2012
14/02/2014
50
6.750%
01/2013
27/01/2012
27/01/2014
70
6.750%
22/2012
24/12/2012
24/12/2013
60
6.750%
35
Local Debt Monitor
Latest T-Bonds Issues
2 years T-Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
T0813
18/02/2013
18/02/2015
80
7.950%
T0513
05/02/2013
05/02/2015
60
7.950%
T0313
29/01/2013
29/01/2015
70
7.950%
3 years T-Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
T1913
31/03/2013
31/03/2016
75
7.770%
T1813
27/03/2013
27/03/2016
75
7.958%
T1713
25/03/2013
25/03/2016
75
8.163%
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 (%)
T0712
11/03/2012
11/03/2017
75
7.750%
T0412
19/01/2012
19/01/2017
50
7.489%
Public Utility Bonds
Issue Date
Maturity Date
Size - million
Coupon (%)
PB55 (Water Authority)
05/09/2012
05/09/2015
26
8.134%
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%
36
Prime Lending Rates
37
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38