This week was very busy with regional events heavily affecting Eurobonds’ prices. The week kicked off with major political unrest in Turkey negatively impacting Emerging Markets and MENA region bonds led by retail and hedge Funds investors de-risking their positions and diverting capital into other high yielding bonds. Lebanese Sovereigns were trading around 17.625 – 18.00 cents to the dollar.

Compounding this uncertainty, renewed military activities in Gaza raised concerns over the potential resurgence of the conflict along the Lebanese-Israeli border, following an unidentified rocket launch at the start of the week that led to multiple Israeli airstrikes on Lebanese soil. These developments brought upon a negative in ROL Eurobond prices, which fell to between 17.12 and 17.625 cents to the dollar, with heightened activity on the sell side.

On the local financial front, Lebanon’s cabinet has appointed Mr. Karim Souaid as the new Central Bank Governor, selecting a private-sector finance expert to spearhead a long-overdue overhaul of the financial sector and stimulate economic recovery. Volatility and geopolitical developments were significant factors influencing Eurobond prices, which experienced a retreat of approximately 100 basis points on a week-over-week basis. Despite the appointment of a new Central Bank Governor, viewed as a critical prerequisite for negotiations with the IMF, sovereign bond prices failed to gain steam and ended the week at trading levels between 16.5 and 17.00 cents to the dollar.