| 15 Mar 2010 |
|
Lebanon's external debt appraisal kept at 'underweight'
- Text size
15 March 2010
BEIRUT: Merrill Lynch maintained its recommendation on Lebanon’s external debt at “undeweight” in its model portfolio of emerging markets debt and kept Lebanon’s market weight at 2.1 percent in March 2010, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group.
Last January, Merrill Lynch revised downward its recommendation to “underweight” from “market weight” in its portfolio and reduced Lebanon’s market weight from 5.5 percent after it rebalanced its portfolio at the end of last year to reflect its 2010 views of the external debt market.
Lebanon’s allocation remained unchanged at 2.1 percent since the beginning of the year. It was 5.5 percent in September, 5.9 percent in July, 7.4 percent in April, and 6.9 percent in January 2009.
Lebanon’s external debt rating of “underweight” placed Lebanon in the same category as Brazil, Colombia, Peru, the Philippines and South Africa. Lebanon’s “underweight” is similar to the recommendation on the Europe, the Middle East and Africa (EMEA) region and for similarly rated countries. Lebanon is represented in the portfolio by the Republic March 2013 Eurobond. Lebanon accounted for 6.9 percent of the allocations in the EMEA region in March compared to 7.5 percent in January and a high of 25 percent last March. Lebanon’s allocation was the 14th highest among countries in the portfolio, unchanged from January. Lebanon accounted for 12 percent of allocations to similarly-rated countries, up from 10.5 percent in January.
In parallel, Lebanon’s external debt posted the 8th highest return at 2.75 percent among 20 markets in the EMEA region in the first two months of 2010, as well as the 17th best return among the 40 emerging markets included in Merrill Lynch’s Sovereign Plus Debt Index. Lebanon outperformed the EMEA returns of 1.88 percent and the overall emerging market returns of 1.84 percent in the covered period.
Also, Lebanon’s external debt outperformed the 1.93 percent returns posted by similarly rated sovereigns, while it posted the sixth best performance at 2.81 percent in the EMEA region and the 10th best performance in emerging markets in US dollar terms. But it underperformed significantly the 4.13 percent returns of US dollar “B”-rated bonds.
Further, Lebanon’s external debt posted the third-highest returns among 8 countries in the Middle East & Africa region during the covered period, as it came ahead of Iraq with 2.69 percent, Tunisia with 1.67 percent, Morocco with 1.31 percent, South Africa with 0.87 percent and Egypt with -0.04 percent, and behind Ghana with 3.28 percent and Gabon with 3.32 percent. Also, it posted returns of 0.62 percent in February, ahead of Gabon (-0.63 percent), Ghana (-0.27 percent) and Egypt (-0.02 percent), but behind Iraq (2.06 percent), Morocco (0.87 percent), South Africa (0.88 percent) and Tunisia (0.81 percent).
In parallel, Lebanon’s external debt posted the 11th highest return in the EMEA region and the 17th highest return in emerging markets during February 2010. It underperformed the EMEA returns of 0.95 percent, the emerging markets returns of 1.36 percent and the 1.15 percent returns of similarly-rated sovereigns for the same month.
Merrill Lynch said the spread on Lebanese Eurobonds ended February at 309 basis points, 12th narrowest in the EMEA region and 23rd narrowest among emerging markets. It was wider than the EMEA spread of 257 basis points and the emerging markets overall spread of 288 basis points as at end-February 2010. Also, Lebanon’s spread tightened by two basis points in December, as spreads in the EMEA tightened by three basis points while spreads in emerging markets overall tightened by 13 basis points in the same month. – The Daily Star
© Copyright The Daily Star 2010.Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Loading ...
Post a Comment
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.