20170619-法国巴黎银行-CEEMEA_sovereign_credit_navigator_22页_380kb

CEEMEA Sovereign Credit Navigator Summary – 19 June 2017

Core Content

This report provides an analysis of sovereign credit movements in the CEEMEA region, with a focus on relative value opportunities and market performance. It outlines the current credit landscape, including key trends, rating reviews, and specific recommendations.

Main Points

1. Credit Week Outlook

• The Gulf Cooperation Council (GCC) remains the central focus for CEEMEA credit.
• There is anticipation of clarity on the list of demands from Saudi Arabia and the UAE to end sanctions on Qatar.
• If Qatar fails to meet many of these demands, there could be a resurgence of tensions and renewed pressure on credit in the near term.

2. Rating Reviews

• No planned rating reviews in CEEMEA this week.

3. Performance Recap

• CEEMEA sovereigns ended last week around 3bp wider on average.
• The GCC saw the strongest performance, with Qatar around 17bp tighter on the week on average, and Kuwait and other GCC countries also outperforming.
• Africa was under the most pressure, particularly oil-exporting countries such as Gabon (31bp wider), Nigeria, and Angola.
• Russia underperformed due to political noise and low oil prices, ending the week 11bp wider on average.

4. Relative Value Opportunities in CEE

• Poland $ bonds are considered expensive relative to other CEE $ bonds and the Poland € curve, with the xccy-adjusted differential near 3m highs.
• The report recommends switching from Poland $ '24s into Republic of Hungary $ '24s.
• High-yielders Croatia and Serbia have outperformed in the $ space, particularly versus Hungary and Slovakia.
• Croatia € bonds have compressed to other CEE curves.

5. GCC Relative Value

• Market weakness in the GCC is attributed to recent tensions and oil price weakness.
• Saudi Arabia stands out as the most expensive name in the region on a historical relative value basis.

Key Information

1. Z Spread Change ($ Bonds)

2. 1W Outperformers

• Qatar: -17
• Kuwait: -8
• Georgia: -8
• Oman: -5
• Saudi Arabia: -4
• Abu Dhabi: -4
• Turkey: -3
• Egypt: -2

3. 1W Underperformers

• Gabon: 31
• Kenya: 25
• Nigeria: 24
• Angola: 20
• Cameroon: 18
• Rwanda: 17
• Ethiopia: 17
• Ivory Coast: 16

4. Relative Value – CEE $ Bonds

5. Relative Value – Russia, Turkey, South Africa $ Bonds

• The report includes a detailed table of Z-spread differentials for various bond pairs, highlighting relative value opportunities and spreads.

Summary

• The GCC remains a focal point with ongoing tensions and potential for renewed pressure on credit.
• No rating reviews are planned in CEEMEA this week.
• Poland $ bonds are expensive relative to other CEE $ bonds and the € curve, suggesting a relative value opportunity.
• High-yielders in CEE, such as Croatia and Serbia, have outperformed.
• Russia and Turkey have seen some performance improvements, but are still under pressure.
• The report emphasizes the importance of monitoring relative value differentials and market movements for investment decisions.