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TOTAL RETURN INDEX HSBC/NASDAQ DUBAI MIDDLE EAST


151 150 149 148 147 146 145 144 143 142 141


18-31 Aug 2011 1-30 Sept 2011 3-31 Oct 2011 1-18 Nov 2011


MAIN REGIONAL BONDS: CURRENT PRICES SOVERIGNS


ISSUER COUPON MATURITY


Abu Dhabi Govt 5.5% 4/08/2014 Dubai Govt Dubai Govt Qatar Govt


Bahrain Govt Egypt Govt


Morocco Govt


6.7% 10/5/2015 7.75% 10/5/2020 4% 1/20/2015 5.5% 3/31/2020 5.75% 4/29/2020 4.5% 10/5/2020


CORPORATES ISSUER Taqa Aldar


Dubai Holding DEWA Qtel


Qatari Diar SABIC


Mumtalakat MBPS KIPCO


BANKS ISSUER ADCB NBAD


Emirates NBD


Saudi British BBK


SUKUK ISSUER TDIC ADIB


Dubai Govt DIFC


JAFZA


DP World Emaar


Dar Al Arkan Nakheel


COUPON MATURITY 4.75% 9/15/2014 10.75% 5/27/2014 L+37.5bps 2/1/2012 6.375% 10/21/2016 3.375% 10/14/2016 5% 7/21/2020 3% 11/2/2015 5% 6/30/2015 11.25% 11/15/2015 8.875% 10/17/2016


COUPON MATURITY 4.75% 10/8/2014 4.25% 3/25/2015 L+450bps 4/30/2012


HSBC Bank ME 3% 10/21/2015 CBQ


5% 11/18/2014 3% 11/12/2015 4.5% 10/28/2015


P.D.A* MATURITY 4.949% 10/21/2014 3.745% 11/04/2015 6.396% 11/03/2014 L+37.5bps 6/13/2012 L+130bps 11/27/2012 6.25% 07/02/2017 8.5% 08/03/2016 10.75% 02/18/2015 10%


08/25/2016 96 / DECEMBER 2011


CURRENCY MID PRICE YIELD MOODYS S&P USD USD USD USD USD USD EUR


109.50 102.25 103.50 105.75 94.38 97.25 90.63


1.41% Aa2 6.04% NR 7.21% NR 2.10% Aa2 6.38% NR 6.17% Ba1 5.89% NR


AA NR NR AA


BBB BB-


BBB-


CURRENCY MID PRICE YIELD MOODYS S&P USD USD USD USD USD USD USD USD USD USD


104.38 109.50 97.75


103.25 101.13 107.75 100.75 98.38 83.50 108.75


3.11% A3


6.58% B3 13.00% B3 5.61% Ba1 3.12% A2 3.93% Aa2 2.80% A1 5.50% NR 17.14% NR 6.74% Baa3


NR B


NR NR A


AA A+


BBB B+


BBB-


CURRENCY MID PRICE YIELD MOODYS S&P USD USD USD USD USD USD USD


104.50 103.88 100.00 99.38 105.25 101.00 93.75


3.10% A1 3.02% Aa3 5.00% A3 3.17% A1 3.14% A1 2.73% NR 6.32% Baa2


A


A+ NR NR A- A


NR


CURRENCY MID PRICE YIELD MOODYS S&P USD USD USD USD AED USD USD USD USD


105.63 101.88 100.63 93.50 92.00 102.00 100.75 90.63 72.50


2.91% A1 3.23% A2 6.16% NR 13.15% B3 11.48% B2 5.82% Baa3 8.30% B1 14.47% NR 19.03% NR


AA NR NR B+ B


BB BB


BB- NR


The HSBC/NASDAQ Dubai Middle East Total Return Index tracks the total return of an emerging Middle East sukuk/bond portfolio. Total return takes into account the income from coupon payments, in addition to any appreciation/depreciation in the price of the security.


VIEW THE EXPERT’S


On closing a primary bond or sukuk issuance – i.e. where they are first sold to investors - an active trading period begins. Investors look to buy and sell in the secondary market to ensure they end up with the credit exposure they initially intended. When acting as a joint lead manager on a new


issue, we are expected to act as market makers providing two-way executable prices to both buyers and sellers. However, what we’ve seen recently is the


emergence of two themes. Firstly, as the macro- economic environment causes banks to re-assess their business strategies, some international banks have pulled their regional trading teams out of the region. This has impacted their ability to trade MENA bonds ‘on the ground’ with the same degree of local knowledge, presence and focus. Secondly, by not being in the local flow of bonds,


the direct sales relationship with regional investors starts to taper off. This will inevitably start to impact on the reach of a bank when placing a bond in primary issuance. The danger is that, with no regional support, the


securities risk becoming illiquid and languishing at wide levels, which would form a poor benchmark and impact the issuer when they come back to the market. Additionally, with a reduced regional presence banks risk focusing on too narrow a range of buyers. How can the market manage this? There is


little that can be done to influence the global strategies of the international financial institutions. However, the remaining active participants will now need to work harder to maintain a level of active engagement bridging the flows between the regional and international issuer community to ensure regional bonds remain relevant in a global market place.


GEORGES ELHEDERY, Head of global markets, MENA, HSBC


Issued by HSBC Bank Middle East Limited. Regulated byJersey Financial Services Commission. All figures quoted are sourced from Bloomberg and HSBC and are correct at the time of publication. Past performance is an not an accurate guide to the future. This information is general and does not take into account your circumstances, objectives or needs. You should consider these matters and consult your financial advisor prior to making any investment decisions. For professional assistance, contact HSBC on 800 40 4443.


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