EM CEEMEA CREDIT: QIBKQD: FV for USD bench 5Y Sukuk
Qatar Islamic Bank (QIBKQD; A1/-/A)
New issue deal: USD 5Y benchmark in Sukuk format
IPT @ T+115-120bp
FV @ T+80bp
- We sketch our FV considerations (z+113bp or T+80bp) looking at comparables among peer issuers in Qatar. To gain some perspective, we anchor our analysis looking at spread moves (approx. -20bp) vs when QIB posted 1Q25 earnings results back in mid-April (see chart below).
- Our feeds show recently issued Al Rayan Bank’s 30s (MAALRA; A2/-/-) charting at T+90bp or z+123bp, having launched some two weeks ago at T+80bp or z+115bp. That leaves with 10bp discount for the proposed deal. Furthermore, looking at the seasoned QIB bonds, we note QIBKQD 29s chart at z+98bp, ie 15bp of spread pick up for the extension.
- For context, when Qatar Islamic Bank posted its Q1 results, we noted best-in-class capital adequacy, resilient profitability and sound asset quality. Net PBT +2.8% YoY stood at QAR992.8mn. Net Financing Income was marginally lower YoY at QAR2.28bn, offset by higher YoY contribution from investing activities, flat YoY F&C, leaving total income flat YoY at QAR2.8bn.
Asset growth showed corporate banking’s core segment at QAR129bn sequentially up from QAR123.2bn in previous quarter, contributing to total assets +10% YoY at QAR211.6bn. Net impairments were stable YoY at QAR357mn. Capital position remained adequate with a conservative CET1 at 17.6%, higher vs YE24 at 17.1%, a distinguishing factor supporting the Co.’s Sukuk funding strategy.
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Historical bullets
USDCAD TECHS: Hits Bear Trigger, New Cycle Low
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4087 50-day EMA
- RES 1: 1.3906/3935 High Apr 17 / 20-day EMA
- PRICE: 1.3793 @ 17:00 BST May 2
- SUP 1: 1.3760 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD deteriorated further Friday, with prices slipping through the bear trigger to narrow the gap with next support. The fresh cycle low reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3943, the 20-day EMA.
AUDUSD TECHS: Consolidation Phase
- RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6528 High Nov 29 ‘24
- RES 2: 0.6471 High Dec 9 ‘24
- RES 1: 0.6470 High May 2
- PRICE: 0.6445 @ 16:59 BST May 2
- SUP 1: 0.6344/6316 Low Apr 24 / 50-day EMA
- SUP 2: 0.6181 Low Apr 11
- SUP 3: 0.6116 Low Apr 10
- SUP 4: 0.5915 Low Apr 9 and key support
AUDUSD remains inside a consolidation phase, having traded either side of the 0.6400 level for 10 consecutive sessions. The underlying trend remains bullish and the pair is trading close to recent highs. Price has recently breached a key resistance at 0.6409, the Dec 9 ‘24 high. This breach reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6316, the 50-day EMA. A clear break of this EMA would be a concern for bulls.
US TSYS: Rates Retreat, Sentiment Improved Though Trade Risk Remains
- Treasuries look to finish near late Friday session lows after trading firmer on the open, higher than expected Nonfarm payrolls at 177k (sa, cons 138k) of which private contributed 167k (sa, cons 125k) triggered the early reversal.
- However, two-month revisions of -58k offset the 39k beat for nonfarm payrolls, with a similar story for private (a 42k surprise vs -48k two-month revision).
- Stocks are back near four week highs - pre-"Liberation Day" levels as hopes of some trade deal being made improved sentiment.
- The Wall Street Journal reports that "Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade... potentially offering an off-ramp from hostilities to allow for trade talks to start." The Journal notes that "discussions remain fluid" and China "would like to see some softening of stance from President Trump".
- Currently, the Jun'25 10Y contract trades -20 at 111-07.5 vs 111-02 low -- initial technical support (50-dma) followed by 110-16.5/109-08 (Low Apr 22 / 11 and the bear trigger). Curves bear flattened, 2s10s -3.480 at 48.002, 5s30s -4.911 at 86.807.
