Transcript Local Debt Monitor

Interest Rate Monitor
March 3, 2013
Brief Overview
International
US: Treasury yields drop, a softer Fed tone, the
sequester and strong data continues
MENA Region
Egypt reveals its economic reform plan in hopes
of agreeing on IMF loan
Eurozone: sentiment remains fragile with political
uncertainty back in Italy
GCC News Highlights
UK manufacturing contracts, raising concerns of a
triple-dip recession
GCC interbank rates
China: concerns about strength of recovery
Comparative MENA Markets
More aggressive easing in the horizon
Local Economy
Markets overview
Major Indices: Wall street rebounds despite the
sequester
New and analysis
 Interest Rate Forecasts
Commodities and Currencies: Gold and sterling hits 2
½ year low
 Jordan’s trade deficit increases, but signs of
dollarization reversal
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
• Amid talk of more Fed bond purchases coupled with
“haven” flows following the inconclusive Italian
election, the benchmark yields fell sharply lower in
the past few sessions.
• Yields of 10-year T-notes fell 14 basis points the past
week.
As of March 2
1 Month
3 Months
6 Months
2 Years
5 Years
10 Years
30 Years
0.07%
0.11%
0.12%
0.24%
0.74%
1.84%
3.05%
1 Week Ago A Month Ago
0.11%
0.13%
0.14%
0.25%
0.84%
1.98%
3.17%
0.02%
0.07%
0.11%
0.26%
0.88%
2.01%
3.21%
4
Negotiations fails as US Sequester kicks in
•
In the US there is the possibility of a soft patch on the back of the tax hikes in
January and the Sequester public expenditure cuts kicking in from 1 March
although US data has so far been resilient.
•
The federal government enters a controversial new phase of deficit cutting Friday,
as an automatic trigger begins slicing budgets in some areas while leaving
programs such as Medicare and Medicaid—among the largest drivers of future
debt—largely untouched.
•
Mr. Obama signed an order late Friday directing $85 billion in cuts to domestic and
defense programs, over the next seven months, after holding a fruitless meeting
with congressional leaders who remained at odds over how to avoid the
reductions, known as a sequester.
The automatic spending cuts, the so-called sequester, will be equally distributed
between defence and non-defence spending.
•
•
Both Republicans and Democrats had said for more than a year that they would
rather replace the indiscriminate cuts with a more gradual, negotiated deficitreduction deal.
•
Many economists say restrained federal spending will continue to be a drag on
GDP growth during the first half of 2013, holding back annual gains by about a half
percentage point.
5
Negotiations fails as US Sequester kicks in
•
•
•
•
Investors on Friday shrugged off the onset of the
cuts, sending the Dow Jones Industrial Average
up 35.17 points to 14089.66, its third-highest
close of all time.
What's Next:
March 1
The White House is expected to alert agencies
their budgets have been cut. Agencies will begin
notifying employees, contractors, and states that
spending will contract over the next seven months.
Although the sequester is allowed to run for
some time, it is still believed that Congress will
find some way to replace it by a more thought
through budget deal sometime this year.
Early to mid
March
Furlough notices will begin being sent by agencies
to many of their employees, warning that unpaid
leave could begin in 30 more days.
March 27
Unrelated to the sequester, funding for some
federal programs and agencies expires. If an
agreement isn't reached, a partial government
shutdown could ensue.
Early to mid
April
If a shutdown is averted, many agencies will begin
unpaid leave for employees, typically one day per
week or one day every other week. The cuts'
impact may become more visible, possibly
affecting places like airports.
September 30
The federal budget year ends, meaning the cuts
have to be accounted for by this time.
October 1
The next federal budget year begins, triggering a
second year of sequester cuts.
Ratings firm Standard & Poor's said Friday that
the United States economy can weather the
drastic spending cuts known as the sequester if
they are short-lived,.
S&P said the cuts, as well as a potential
government shutdown at the end of March due
to the budget fight, "could have far-reaching,
although probably shallow, effects on the US
economy and its prospects for a strengthening
recovery."
6
Bernanke: no sign of tightening
•
Federal Reserve Chairman Ben Bernanke gave no sign of tightening
following last week’s confusion as the FOMC’s minutes of meeting
showed division over the possibility of an early exit.
•
The Fed chairman gave his semi-annual testimony to the Congress
this week and the tone was generally dovish. In particular, he
downplayed the costs of doing QE, stating the benefits from asset
purchases clearly continue to outweigh the potential costs.
•
Furthermore, Bernanke offered strong new assurances Friday that
he wouldn't back away from his easy-money policies, despite
worries at the Fed that its programs could destabilize the financial
system.
•
Mr. Bernanke argued that tightening policy now not only could
short-circuit the economic recovery, it also could destabilize
financial markets.
•
He also said the Fed, in the future when it starts to tighten credit,
could adjust the pace of selling its Treasury and mortgage-backed
securities "to dampen excessively sharp adjustments in longerterm interest rates."
7
US: manufacturing activity in surprise rebound
•
American manufacturers are doing better than many of their competitors
around the world as increased spending by U.S. businesses and a revival in
global trade creates more demand for their products.
•
The Institute for Supply Management said Friday that its gauge of U.S.
factory activity expanded in February for the third straight month to 54.2—
continuing the biggest jump in manufacturing activity since the economic
recovery started in July 2009. A reading above 50 indicates growth.
•
Exports jumped to a nine-month high, while new orders and order
backlogs, both gauges of future business, rose sharply.
•
The report also suggests that manufacturers aren't nervous about the
looming impact of the "sequester," the $85 billion in across-the-board
government spending cuts that kicked in Friday.
•
Factory surveys already released by regional Federal Reserve banks gave a
mixed reading on February factory activity. Some Fed banks reported
stronger growth but others said their manufacturers were pulling back in
February.
•
The ISM survey, on the other hand, was generally stronger, except for
employment.
8
US GDP growth revised up
But recovery continues to face headwinds including uncertainty over government
spending
•
The U.S. economy grew slightly in the fourth quarter of 2012—a
reversal from an initial report of contraction—as government
spending cuts mostly masked fundamentals that point to stronger
growth this year.
•
The nation's GDP, a measure of all goods and services produced in
the economy, advanced at a 0.1% annual rate between October
and December, the Commerce Department said Thursday. The
figure was revised up from an initially estimated 0.1% downturn.
•
The weak showing last quarter underscored that government
spending cuts are slowing the recovery's momentum. And the
budget slashing is likely to continue, with $85 billion in broad
reductions.
•
Last quarter's GDP advance was among the weakest of the
current recovery, but the revision means the economy has grown
for 14 consecutive quarters. For all of last year, the GDP advanced
2.2%, an improvement from the 1.8% gain in 2011.
•
The fourth quarter was revised upward largely because exports
were stronger than first estimated, and imports, which subtract
from GDP, slowed further.
9
Data continues to come in strong
•
Strong numbers for the US housing market and consumption continued in January despite tax hikes and
the prospect of cutbacks.
•
January data showed healthy home sales activity with both pending and new home sales soaring. Home
prices also continued the upward trend. The Case-Shiller index which only covers the major cities is up
9%. The increase in home prices is an important cushion to household incomes from the payroll tax
increase.
•
US consumers increased spending in January despite a sharp drop in income linked to 2013 tax changes,
government data released Friday showed. Personal spending, which accounts for about 70% of US
economic activity, rose 0.2% in January, double the increase in December, the Commerce Department
reported.
•
Personal income dropped 3.6%, the most in two decades, after rising 2.6% in December. The income
volatility came after companies advanced employee bonuses and other forms of "irregular" pay that
would have been paid in 2013 to December to avoid the January 1 expiration of payroll tax breaks.
•
But instead of spending less, Americans opted to save less in January. The personal-savings rate
dropped to 2.4% from 6.4% the prior month. That was the lowest rate since November 2007.
•
Moreover, despite concerns over inflationary pressures due to the Fed’s QE, Friday's report showed
only moderate price increases. The price index for personal-consumption expenditures, the Fed's
preferred gauge for inflation, was up 1.2% year over year in January. The Fed targets a level of about
2%. On a monthly basis, the index was flat.
The closely watched core PCE index, which excludes volatile food and energy prices, was up 1.3% from
a year earlier.
•
10
Signs of tension in the eurozone’s bond market
•
Italy's political stalemate jolted European
financial markets early Tuesday, weighing on
stocks around the continent and sending
investors scurrying out of bonds of Europe's
troubled south and into northern havens,
breaking a seven-month calm in European
debt markets.
•
While the periphery’s borrowing costs
stabilized towards the end of the week, signs
of tension remain as sentiment towards the
bloc remains fragile.
•
Italy’s implied borrowing costs were up 6
basis points on Friday at 4.97%, though lower
than 4.96% in the immediate aftermath of the
inconclusive election.
•
Meanwhile, equivalent duration German
Bund yields traded at eight-week lows
at1.41%, a move towards safe havens.
11
Political uncertainty back in Italy, raising fears about
commitment to tackle budget deficits
•
In a national election meant to push Italy further down a path of economic
reform, voters delivered political gridlock that could once again rattle
Europe's financial stability.
•
A majority of voters endorsed parties that had promised to tone down or
even reverse the financial sacrifices Italy has promised its European
partners, giving surprise lifts to both the center-right coalition of former
premier Silvio Berlusconi and a party of protest led by a former comedian.
•
The general election in Italy has left the political outlook highly uncertain as
none of the coalitions envisaged prior to the election are able to form a
government with a majority in the Senate.
•
A broad Bersani-Berlusconi government seems more and more likely at the
moment. It would probably be short-lived and result in a reform pause.
•
A sale of Italian government bonds on Wednesday drew solid demand,
helping soothe jitters that the political deadlock could destabilize Europe's
second-biggest sovereign debt market
Italy sold €4 billion in 10-year bonds Wednesday at an average yield of
4.83%, a four-month high but well below levels last summer above 6.5%.
•
12
ECB support may be required to avert crisis
•
The election outcome in Italy has created a muddled and potentially disastrous situation.
However, Italy can probably still rely on ECB support to avert a collapse and market reaction
has been muted.
•
European Central Bank President Mario Draghi said Wednesday that Europe's governments
bear the responsibility for revamping their economies and restoring sound finances.
This suggests there will be no softening in the central bank's insistence that countries agree to
politically unpopular budget cuts and economic reforms to qualify for any ECB bond-buying aid.
•
•
Therefore, it is important that whatever form the new government takes, it will behave in such
a way that investors can remain confident that the ECB’s OMT programme will remain in place.
•
As for Spain, Prime Minister Mariano Rajoy said the government significantly narrowed its
budget deficit last year, a sign that some of Europe's toughest austerity measures are yielding
results.
•
Answering questions in Parliament on Wednesday, the prime minister said the deficit narrowed
to 6.7% of gross domestic product in 2012 from 8.96% of GDP in 2011. The result vindicated the
government's focus on overhauling the country's ailing finances since it came to power at the
end of 2011, he said.
13
Spain still needs more austerity to meet deficit targets
•
However, tax increases and spending cuts have helped to deepen
Spain's recession and push its unemployment rate past 26%,
feeding a debate in Europe over the right pace of deficit reduction
as the Continent struggles with faltering economies and fast-rising
debt loads.
•
Mr. Rajoy himself has relaxed his deficit-cutting drive and last week
unveiled a package of modest stimulus measures, including tax
breaks for small businesses and incentives to hire unemployed
youths.
•
Spanish bonds rallied in response, driving down borrowing costs.
The yield on Spain's benchmark 10-year government bond fell
nearly half a percentage point to 5.1%, largely reversing the surge
on Tuesday caused by concerns over political instability in nearby
Italy.
•
The European Commission, the EU's executive arm, predicted last
week that Spain's deficit would be around 7% of GDP, though this
figure would grow to around 10.2% if the impact of a massive
bank-recapitalization program were included.
14
Europe's jobless crisis deepens
•
Unemployment in the eurozone climbed to its highest
rate on record in January, official data showed Friday,
underscoring the heavy toll the currency bloc's fiscal crisis
and recession are exacting on a populace weary of
austerity.
•
Eurostat, the European Union's statistics agency, said
11.9% of the eurozone's workforce was unemployed in
January, the highest percentage for the 17 countries that
make up the currency bloc since records began in 1995.
The figure is higher than the jobless rate of 11.8% in
December.
•
Underpinning the rise was a surprise jump in Italy's
unemployment rate to 11.7% in January from 11.3% in
December. The latest month's figure was the highest
since 1992, the country's statistics agency said.
•
Other data from Eurostat on Friday showed the annual
inflation rate in the eurozone was 1.8% in February, down
from 2% in January and the lowest rate since August
2010, which could encourage consumer spending due to a
reduced squeeze on household incomes, and allow the
ECB to offer more support measures.
15
Eurozone manufacturing
More signs to indicate that Germany is picking up and France is
slowing
•
A survey of manufacturing activity in the eurozone in February
suggested the currency bloc's recession will continue in the first
quarter at least.
•
Data company Markit said Friday its monthly poll of manufacturing
industry executives held steady at a reading of 47.9 in February,
underneath the 50 threshold that would signal growth. Activity has
been shrinking for 19 months, the company said.
•
"While the manufacturing sector is likely to have again acted as a
drag on the overall economy in the first quarter, causing gross
domestic product to fall for a fourth consecutive quarter, there are
signs that the downturn has become less severe," said Chris
Williamson, chief economist at Markit.
•
Activity in February rose in Germany, where the reading was the
highest in over a year, and Ireland but fell in the other six countries
for which Markit gave detailed figures.
•
The steepest fall was in Greece, which showed a reading of 43. That
was nonetheless the crisis-hit country's best performance in nine
months.
16
Britain's manufacturing activity unexpectedly shrank in
February
•
Data firm Markit said Friday its UK manufacturing purchasing
managers' index slid into contraction territory with a weaker-thanexpected 47.9 in February from January's 50.5. Economists had
forecast the index would rise to 51.0.
•
Sterling sank in response to the numbers. By midafternoon in
Europe, the pound was trading below the $1.50 level for the first
time since July 2010, taking its losses against the dollar so far this
year to more than 7%. Sterling also weakened against the euro.
•
"The return to contraction of the manufacturing sector is a big
surprise and represents a major setback to hopes that the U.K.
economy can return to growth in the first quarter and may avoid a
triple-dip recession," said Markit's chief economist Chris Williamson.
•
A strong March performance is now needed for the sector—which
makes up 10.4% of GDP output—to avoid acting as a drag on
growth.
•
The sharp decline in the manufacturing PMI was led by a slump in
new orders, particularly from the UK and the eurozone. Firms also
cut staff at the fastest rate since late 2009 in response to weakening
demand and the uncertain economic outlook.
17
China: concerns over recovery strength as manufacturing
activity slows
•
China’s manufacturing sector grew more slowly in February,
suggesting the country’s recovery could be slackening according to
two business surveys.
•
China's official purchasing managers' index fell to 50.1 in February
from January's 50.4, still indicating marginal expansion.
•
Moreover, the HSBC China Manufacturing Purchasing Managers Index,
a gauge of nationwide manufacturing activity, fell to 50.4 in February,
compared with a final reading of 52.3 in January, HSBC Holdings PLC
said Monday.
•
The weaker readings have raised concerns over the momentum of
recovery in the world's second-largest economy.
•
Nevertheless, the Chinese economy is still on track for a gradual
recovery; the February reading still marks the fifth straight month that
the index has been above 50.
•
The slower pace of manufacturing expansion partly reflects the impact
of a week-long Chinese New Year holiday and partly the continued
softness of external demand
18
Japan: more aggressive easing expected
•
In Japan, it was announced that Haruhiko Kuroda, the current president of
the Asian Development Bank, is the government’s candidate to replace the
current Bank of Japan governor Masaaki Shirakawa when he retires together
with his two deputy governors on 19 March.
•
Prime Minister Shinzo Abe continues to seek a more aggressive regime to
overturn more than a decade of deflation.
•
The government’s two nominees for deputy governor are Professor Kuiko
Iwata, who has been extremely critical of BoJ and executive director for BoJ’s
International Affairs Office, Hiroshi Nakaso.
•
Both Kuroda and Iwata have been arguing forcefully that BoJ has not eased
monetary policy forcefully enough and must be regarded as very dovish.
•
Meanwhile, the CPI data shows deflation is very real, as consumer prices
declined for the third month.
19
Wall street rebounds following a surprise rise in US
manufacturing activity
20
Gold continues stumble, and Sterling touches 2 ½ year
low
21
Major Interest Rate Forecasts
Market yield
(March 3)
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
US 10-year
1.84
1.83
1.98
2.13
2.28
2.51
2.67
Fed Fund Target Rate
0.25
0.25
0.25
0.25
0.25
0.25
0.25
1.41
1.60
1.71
1.81
1.92
2.04
2.21
0.75
0.75
0.75
0.75
0.75
0.63
0.75
1.87
0.50
1.97
0.50
2.1
0.50
2.24
0.50
2.40
0.50
2.51
0.50
2.64
0.50
Rate (%)
United States
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
March 3, 2013 - March 8, 2013
Date
4-Mar Mon
5-Mar Tue
6-Mar Wed
7-Mar Thu
8-Mar Fri
Currency / Event
GBP Purchasing Manager Index Construction
EUR Euro-Zone Producer Price Index (YoY)
EUR Eurogroup meeting
CNY HSBC Services PMI
AUD Reserve Bank of Australia 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 Retail Sales (YoY)
USD ISM Non-Manufacutring Composite
AUD Gross Domestic Product (YoY)
EUR Euro-Zone Gross Domestic Product s.a. (YoY)
USD ADP Employment Change
CAD Bank of Canada Rate Decision
USD Factory Orders
USD U.S. Federal Reserve Releases Beige Book
JPY Bank of Japan Rate Decision
EUR German Factory Orders n.s.a. (YoY)
GBP Bank of England Rate Decision
GBP BOE Asset Purchase Target
EUR European Central Bank Rate Decision
USD Trade Balance
JPY Gross Domestic Product Annualized
JPY Trade Balance - BOP Basis (Yen)
CNY Trade Balance (USD)
CNY Exports (YoY)
CNY Imports (YoY)
EUR German Industrial Production n.s.a. and w.d.a. (YoY)
USD Change in Non-farm Payrolls
USD Unemployment Rate
CAD Unemployment Rate
GMT
09:30
10:00
14:00
01:45
03:30
08:55
09:00
09:00
09:30
10:00
15:00
00:30
10:00
13:15
15:00
15:00
19:00
11:00
12:00
12:00
12:45
13:30
23:50
23:50
11:00
13:30
13:30
13:30
Forecast
Previous
48.70
2.10%
3.00%
0.50%
54.00
3.00%
54.10
47.30
47.30
51.50
-3.40%
55.20
3.10%
-0.90%
192K
1.00%
1.80%
0.10%
-1.80%
0.50%
375B
0.75%
-$38.5B
-0.40%
-¥567.6B
$29.15B
25.00%
28.80%
-1.10%
157K
7.90%
7.00%
23
Central Bank Meetings Calendar
Calendar for upcoming meetings of main central banks :
Current
Rate
Expected Rate
Decision
March 20
0.25%
0.25%
European Central Bank (ECB)
March 7
0.75%
0.75%
Bank of England (BoE)
March 7
0.50%
0.50%
Bank of Japan (BOJ)
April 3
0.10%
0.10%
Swiss National Bank (SNB)
March 14
0.00%
0.00%
Bank of Canada (BOC)
March 6
1.00%
1.00%
Reserve Bank of Australia (RBA)
March 5
3.00%
3.00%
Reserve Bank of New Zealand (RBNZ)
March 13
2.50%
2.50%
Central Bank
Month
US Federal Reserve (FOMC)
24
Regional
25
Egypt reveals its economic reform programme,
one step closer to IMF negotiations
•
Political unrest has caused the Egyptian pound to tumble 8.2%
against the dollar since the end of last year, and the central bank is
rationing the amount of dollars it sells to banks, prioritizing hard
currency for essential food imports.
•
The government this week revealed, with very little detail, the
economic programme it plans to present to the IMF to get it to
approve a $4.8 billion loan request.
•
The reform programme aims at tightening the budget deficit and
increasing reserves in addition to levying a set of new taxes. And
although fuel subsidies were not mentioned in the programme, the
government had earlier announced steps in that regard.
•
Egypt's Finance Minister Al-Morsi Hegazi said Tuesday that the
programme will be submitted to parliament after which it will be
sent to the IMF. Hegazi added that a mission from the IMF will be
expected to arrive in Cairo in 10 days.
•
The plan aims at tightening the budget deficit to 10.9%. The budget
deficit is meanwhile forecast to hit 12.3% of GDP by end-June
unless economic reforms are implemented.
26
IMF studying revised fiscal steps for Egypt, no loan talks
set
•
The plan also includes accumulating foreign currency reserves to $19bn by end of June 2013
and $22.5bn the following year.
•
It also levies a tax of 0.1% on stock market transactions and a standardised corporate tax of
25%. Meanwhile, the Egyptian government limited the sales tax hike to only some goods to
avoid widespread demonstrations.
•
But analysts believe that with the current climate, achieving the targets set out in the plan is
unlikely.
•
In addition, although not part of the economic reform program, the Egyptian government has
taken action to reduce energy subsidies to curb it’s growing budget deficit. Energy subsidies
make up 20% of the states budget and is essential to revise if Egypt were to secure the IMF
loan.
•
In specific, the government last week raised natural gas and mazut (heavy oil) prices for some
sectors of energy-intensive local industries such as cement and brick factories.
•
Fitch Ratings said on Wednesday that the extended election timetable could delay the
agreement until well into the third quarter. It had previously expected a deal in second
quarter.
27
GCC Economic News Highlights
•
Major contributors to GDP in the Gulf region: Saudi Arabia continued
to be the major contributor to the GCC growth in 2012, with 47% of
the total GDP of the region. UAE accounted for second largest
contributor with its share of 23%. Qatar is the third biggest
contributor with a 12.3% share.
•
Saudi Arabia's nonoil GDP expected to grow over 8% this year: The
macroeconomic conditions remain supportive of the financial system
with Saudi Arabia's nonoil GDP expected to grow over 8 percent this
year following 7.5 percent in 2012, driven by the benefits of economic
diversification and vast projects sourced by record oil revenues,
according to a report by the National Commercial Bank.
•
OPEC February oil output up: OPEC crude oil output rose in February,
the first monthly increase since October, due to higher exports from
Iraq and a slight increase in supply from top exporter Saudi Arabia, a
Reuters survey found on Friday.
•
Dubai's property market set to witness $1 billion influx: Dubai's real
estate market, which is witnessing a resurgence this year, is expecting
a $1-billion investment from the Investment Corporation of Dubai
(ICD)-Brookfield Dubai this year.
28
GCC interbank rates
29
Comparative MENA Markets
For the period 24/02 – 01/03
30
Locally
31
Local interest rates forecasts and major developments
Rate (%)
Jordan
2-year Treasury
Window Rate
Market yield
(March 3)
Q1 2013
Q2 2013
Q3 2013
Q4 2013
7.95
4.00
7.95
4.00
7.75
4.00
7.95
4.25
8.25
4.25
Source: CAB forecasts
•
The excess liquidity in the banking system
has increased following the $500 million
USD denominated bond issuance and less
demand by the government on domestic
debt.
•
The increase in excess liquidity is
anticipated to place downward pressure
on JOD interest rates, especially if foreign
reserves continues it upward trend.
32
Trade Deficit Continues to Widen
•
Last week, figures released showed that Jordan’s trade deficit
for 2012 increased to JD 9.1 billion, compared to JD 7.8 billion in
2011, a 17.2% increase.
•
The increase in deficit was caused by both a 1.5% fall in exports
and a 9.3% rise in imports. Exports fell to JD 5.6 billion from JD
5.7 billion in 2011, while imports rose to JD 14.7 billion from JD
13.4 billion in 2011.
•
The oil import bill increased in 2012 by 24.4%, an indication of
the volatility in Egyptian oil supplies. Imports of crude oil rose to
JD 4.5 billion from JD 3.6 billion in 2011. Therefore, if volatility in
gas supplies continues this year, we could experience another
drag on the economy .
•
Overall, in 2012 exports covered 38.1% of imports, a fall of 4.2%
from last year.
•
Moreover, the government on Thursday raised the prices of
main oil derivatives for March. The government attributed the
increase to a recent rise in the international oil prices.
33
Reversal of the Dollarization Wave
•
•
•
In the first two months of the year, deposits with
licensed banks have increased by a net of JD500
million, an increase of 2.01%, to reach JD25.4
billion.
In specific, during this period, JOD deposits grew
by 600 million to reach JD18.3 billion, or a 3.39%
increase.
Meanwhile, deposits in foreign currency dropped
by JD100 million to reach JD7.2 billion, or a
decrease of 1.37%.
•
This is believed to be due to the Central Bank of
Jordan raising interest rates on JOD to maintain its
attractiveness and in turn providing the necessary
liquidity for economic activity to continue.
•
In addition, with news that FX reserves surpassed
$8 billion, confidence regarding the JOD has
gotten better and we are observing a reversal of
the dollarization wave witnessed last year.
34
Amman Stock Exchange
For the period 24/02 – 28/02
ASE free float shares’ price index ended the week at
(2042.4) points, compared to (2046.7) points for the last
week, posting a decrease of 0.21%. The total trading
volume during the week reached JD(63.8) million compared
to JD(57.7) million during the last week. Trading a total of
(85.3) million shares through (30,457) transactions
The shares of (181) companies were traded, the shares
prices of (87) companies rose, and the shares prices of (61)
declined.
Top 5 losers for the last week
Top 5 gainers for the last week
Stock
% chg
Stock
% chg
Arab Real Estate Development
50.00%
Jordan Press Foundation/al-ra'i
(13.18%)
Darwish Al-khalili And Sons Co. Plc
36.36%
Al-eqbal Investment Company Ltd
(11.11%)
Middle East Diversified Investment
25.00%
Akary For Industries And Real Estate Investments
(10.71%)
Ejada For Financial Investments
25.00%
Specialized Trading & Investment
(9.68%)
National Portfolio Securities
23.08%
Enjaz For Development And Multi Projects Company P.l.c
(9.09%)
35
Local Debt Monitor
Latest T-Bills

As March 3, the volume of excess reserves, including the overnight window deposits held at the CBJ
JD(1980) 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%
36
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 (%)
T0913
20/02/2013
20/02/2016
60
8.600%
T0713
07/02/2013
07/02/2016
60
8.600%
T0613
07/02/2013
07/02/2016
50
8.600%
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%
37
Prime Lending Rates
38
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39