EM CEEMEA CREDIT: SABBAB: FV for USD bench PNC5.5 AT1 Green Sukuk format
Saudi Awwal Bank (SABBAB; A1/-/A-)
New issue deal: USD bench PNC5.5 AT1 Green Sukuk format
IPT at 6.875% area
FV at 6.50%
- We sketch our FV considerations around z+275bp or 6.50% yield area. To gain some perspective, we factor in that current levels remain elevated MYtD, just after the Banque Saudi Fransi AT1 deal was launched. We note that z-spreads have tightened some 30/35bp since (see chart below).
- For comparables, there are several options in terms of recent AT1 deals to look at, all from GCC issuers. We choose to frame the new issue deal between those of two issuers from Saudi Arabia: Al Rajhi Bank (RJHIAB), whose PNC6 AT1 was issued back in January and is charting at z+220bp area, and the recently issued PNC6 AT1 from Banque Saudi Fransi (BSFR), charting at z+280bp area.
- For reference, we also look at Kuwait’s Warba Bank, which launched y’day at z+250bp, our FV there was at z+240bp, suggesting a 35bp premium for the new SABBAB deal.
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SWEDEN: Riksbank Relief As LT Inflation Expectations Steady In April
Swedish money market participant 5-year ahead CPIF inflation expectations were steady at 2.3% in April. While this series has moved away from the 2% target in recent months, in line with an acceleration in spot inflation pressures, the Riksbank will be relieved that the April survey did not report a renewed uptick.
- In an interview with MNI earlier this month, Riksbank Deputy Governor Jansson said that rising trade tariffs are likely to depress economic growth, but while their effects on inflation may be short-lived monetary policymakers must be alert to any risk of price expectations becoming de-anchored.
- Jansson noted that while in theory the Riksbank would be able to look through elevated inflation if expectations remain stable in the near-term, Jansson highlighted the difficulties in practice of doing so and made the case for acting decisively if need be.
- One-year ahead expectations were also unchanged at 2.2%, while 2-year ahead expectations ticked up to 2.3% (vs 2.1% prior).
- 1-year ahead GDP growth expectations were revised sharply lower (1.6% vs 2.4% prior), likely reflecting US President Trumps reciprocal tariff announcements. 2-year ahead GDP growth expectations were 2.0% (vs 2.4% prior), and 5-year ahead expectations were 2.0% (vs 2.1% prior).
- As such, money market participants now expect a deeper Riksbank easing cycle over the next 24 months.
- The survey was conducted Apr 7-Apr 11.
SILVER TECHS: Monitoring Resistance At The 50-Day EMA
- RES 4: $34.903 - High Oct 23 ‘24 and the bull trigger
- RES 3: $34.590 - High Mar 28
- RES 2: $33.117 - 76.4% retracement of the Mar 28 - Apr 7 bear leg
- RES 1: $32.313 - High Appr 7
- PRICE: $32.064 @ 08:04 BST Apr 14
- SUP 1: $30.57728.351 - Low Apr 10 / 7 and the bear trigger
- SUP 2: $27.686 - Low Sep 6 ‘24
- SUP 3: $27.180 - Low Aug 14 ‘24
- SUP 4: $26.451 - Low Aug 8 ‘24 and a key support
Silver is holding on to last week’s gains. For now, the recent move higher appears corrective. The metal on Apr 7, traded through support at $28.748, the Dec 19 low. A clear break of this level would signal scope for a continued sell-off, towards $27.686, the Sep 6 ‘24 low. On the upside, resistance to watch is $32.208 the 50-day EMA. It has been pierced, a clear break of it would alter the picture and highlight a stronger reversal.
MNI EXCLUSIVE: Japan's export market is creating challenges for the BOJ
Japan's uncertain export market is creating challenges for the BOJ's strategy. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
