Snow blankets northern Saudi region of Al-Jouf    Syrian Air to resume operation between Damascus and Jeddah on Nov. 7 after a hiatus of 8 years    21,370 illegal residents arrested in a week    Bronze Age town discovered in Khaybar Oasis    New mechanism for reviewing taxi fares via applications    Harris and Trump in dead heat as Election Day nears    Spain flooding one of many global extreme weather disasters: UN weather agency    EU braces for potential shifts in transatlantic relations ahead of US presidential election    Israeli army nearing end of ground offensive in southern Lebanon, reports indicate    Al Hilal sets record for longest unbeaten streak across all domestic competitions    Al Nassr and Al Hilal share points in intense Riyadh Derby draw    Riyadh's Sports Boulevard receives Platinum ActiveScore certifications    ImpaQ: Riyadh to host first Impact Makers Forum in December    Saudi Arabia ranks 12th globally in international visitor spending in 2023    Hidden sugars in Asia's baby food spark concerns    Saleh Al Shehri strike seals Al Ittihad's Sea Derby win over Al Ahli    HONOR unveils pre-order of the stunning HONOR MagicBook Art 14 Featuring an ultra-slim design, HONOR Eye Comfort Display and AI Cross-OS WorkStation    Derby Week makes its debut in the Roshn Saudi League    Teri Garr, Young Frankenstein and Tootsie star, dies at 79    Indonesia Days event celebrates cultural diversity at Al Suwaidi Park    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Lebanon bond yields jump
Published in The Saudi Gazette on 04 - 08 - 2012

BEIRUT – Lebanese bond yields had their biggest monthly jump in more than three years in July as the revolt in neighboring Syria hobbled tourism, the country's largest foreign-exchange earner, The Daily Star quoted Bloomberg as reporting.
The yield on Lebanon's 8.25 percent dollar-denominated notes due April 2021 jumped 60 basis points last month, the most since December 2008, to 6.55 percent Tuesday, data compiled by Bloomberg shows. Middle East debt yields fell 21 basis points in the period to 4.19 percent, according to HSBC/Nasdaq Dubai's Middle East Conventional US Dollar Bond Index. JPMorgan Chase & Co.'s EMBIG Euro Blended Yield lost 46 basis points to 4.85 percent.
Syria is Lebanon's only land access route for tourism and exports, making the most-indebted Middle East nation vulnerable to spillover from fighting that has left about 20,000 people dead since Syria's uprising started in March 2011. Arab Gulf nations including Saudi Arabia and Qatar warned citizens against travel to Lebanon, triggering the worst tourism season since the civil war ended in 1990, according to the country's hotel association.
“The contagion risk from Syria is deterring investors who are concerned that more civil clashes could erupt in Lebanon and lead to a civil war,” said Sergey Dergachev, who helps manage $8.5 billion of emerging-market assets at Union Investment Privatfonds in Frankfurt. “There are questions about what would happen if the regime falls in Syria.” – Agencies
Violence in Syria, which is under international sanctions, threatens to hurt economic growth as the fighting spills over into Lebanese cities from Beirut to Tripoli in the north. In Syria, troops loyal to President Bashar Assad stepped up an assault on rebels in Aleppo as they try to regain control of the city, a commercial hub.
The yield on Lebanon's 6.1 percent dollar bonds maturing in October 2022 added 23 basis points in July, the biggest monthly advance since January 2011, to 6.31 percent. Yields on dollar debt in the UAE, Qatar and Egypt fell in July. Lebanon's debt yield was little changed Wednesday.
The country's $39 billion economy has been shaken by a history of instability, including a 15-year civil war that destroyed infrastructure and reduced the heart of Beirut to rubble.
Lebanon's gross domestic product will grow at a “fairly sluggish” rate of 2.4 percent this year compared with 1.7 percent in 2011, HSBC Holdings Plc said in a July 3 report. The economy expanded 7 percent in 2010, International Monetary Fund data shows. “Unrest in Syria will continue to weigh on confidence in Lebanon,” Dubai-based HSBC economists Simon Williams and Liz Martins said.
Tourism has fallen each month versus a year earlier from March 2011 to the end of the first quarter of this year, with total arrivals down 16 percent, and visitors from Asia slumping 60 percent. Tourism made up about 20 percent of economic output in 2010.
While Beirut hotel occupancy grew about 32 percent in the first six months of 2012, occupancy at summer resorts outside the capital plunged more than 50 percent in the same period, according to Pierre Achkar, president of Lebanon's Syndicate of Hotel Owners.
“We have lost all the tourism coming by road,” Achkar said in a phone interview from Brummana, Lebanon, on July 26. Achkar is also the Mayor of Brummana and owns a number of hotels throughout the country. “We used to have 17,000 Jordanians per month, of which 14,000 were coming by road and 3,000 by air.”
Lebanon, which at B1 is the fourth-highest non-investment grade at Moody's Investors Service, had a debt to GDP ratio of 136 percent in 2011, according to the IMF – the highest in the Middle East and Africa. Mauritania is the second with a ratio of 92 percent.
The cost of insuring Lebanon's debt against default has jumped 124 basis points in the past 12 months to 488 basis points on July 31, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. The contracts, which pay the buyer face value if a borrower fails to meet its obligations, are the region's second highest, after Egypt.
Lebanon's bond yields benefit from being held mostly by domestic banks, which benefit from high funding levels from remittances of Lebanese nationals abroad. Foreign-currency deposits climbed 3.7 percent in the year to May, while deposits in local currencies jumped 9.9 percent, central bank data shows.
This makes the nation's debt less volatile during “tough global-market environments,” Union Investment's Dergachev said.
Banks' dependence on remittances and the state's ability to service its debt are a “long-term vulnerability,” the London based Economist Intelligence Unit said in a report on July 11. Lebanon, which has about $64 billion of debt according to data compiled by Bloomberg, has never defaulted. – Agencies


Clic here to read the story from its source.