Dubai World crisis – a look at CDS market

I don’t have access to CDS detailed pricing data. However, I can take a glimpse of market data from Markit and CMA. We can only see the "minimal" but let’s explore to see what we can get.

Just saw the "Agreement" in the website: not supposed to reproduce data etc.., so I just point to the direction to get data.

CMA data page

We can look at movers, there are:

• largest widening spread: greatest credit deterioration;
• largest tightening spread: greatest credit improvement.

We can look at the 5-year mid bps, see whether it is large in magnitude. If it is large, then the CDS market views it as high risk of default. There is also change from close bps and %.

BPS is basis point, a unit relating to interest rates that is equal to 1/100th of a percentage point per annum.

Take a look at Sovereign Risk Monitor - Highest Default Probabilities.
There are sovereign tighteners and wideners.

Tightener means less risk compared to previous close.
Widener means more risk compared to previous close.

CPD is Cumulative Probability of Default. Large bps will have large CPD, high risk of default.

This Sovereign Risk Monitor is useful, at least we get to know what are the countries the CDS market participants think as having high risk of default.

Markit data page
Explore the page…

On CDS market summary, the data are in indices form, North America, Europe, Asia, Sovereigns, Volatility. Take a look at Sovereign - Markit iTraxx SovX CEEMEA. If magnitude of spread is high, the market is considering it as risky.

Meaning of these indices can be seen from files available in Markit CDS Documentation & Education, for e.g. we can find out that Markit iTraxx SovX CEEMEA is index for Central & Eastern Europe, Middle East and Africa Sovereign.

Markit Eurex settlements and Markit ICE settlements CDS clearing prices are available.
We can also find Last Quote for the Most Liquid CDS here.

Some other insightful materials are:
CDS calendar;
Credit Event details (we can see from the PDF file their bids and offers, size etc.. in credit event auction);
Announcements;
Useful CDS links (can learn about CDS here);
Markit CDS converter (useful for CDS investors) (but I still don’t know how to use it).

In the Credit Event details PDF file, they put it as "bond", with "coupon", "maturity".

I don’t like this practice. A CDS, credit default swap is derivative, just because it is made bond-like, with coupon, maturity, doesn’t make it a bond. Think of the consequences of Lehman Brother’s Minibond made peoples think it is a bond.

I end this post with a link to Markit Credit Research report dated 27 Nov 2009 for your view:
Dubai contagion overdone ?

There is a graph showing effects on Middle East CDS price.

Dubai World “crisis” – a look at the sukuk market

What is the effect of Dubai World "financial crisis" on sukuk market ?

Take a look at Sukuk market data:
Sukuk market data

It seems that Nakheel Sukuk (nakh.sn), of type "Ijara", previously 90, has down 28 to 62, a drop of 31.11%. However, it seems like there isn’t much effect on other sukuks, even on entities that are downgraded their credit ratings, for e.g. Jebel Ali Free Zone FZE (jafz.sn), DEWA (dewa.sn) and Emaar Properties Sukuk (emaa.sn). Jebel Ali Free Zone FZE even rises by 0.65%.

Hey, I saw our country’s PETRONAS Global Sukuk and Sarawak Corporate Sukuk Inc..

We can look at the detailed chart of Nakheel Sukuk here;
and Sukuk news wire, Islamic finance news and Sukuk Education here.

Global Property Guide - a good resource on global residential property investment

Global Property Guide
This is a one-stop website for global residential property investor.

Some highlights:
1. Interactive Comparison tool
Its Interactive comparison tool is useful.

Add to list the countries that you want to compare, click "compare" and it will yield a comparison table of

• buying price,
• gross rental yield,
• rental income tax,
• roundtrip cost,
• capital gains tax,
• buy-to-let income rating.

I try to compare Malaysia, Singapore, China, Taiwan, Hong Kong, Australia, USA, UK as these are the countries most Malaysian, especially Malaysian Chinese, will invest.

It seems that among these countries, Malaysia’s buying price (1366 USD/sq m) is lowest, gross rental yield (9.22%) is highest, rental income tax (22.42%) is 2nd highest, buy-to-let rating highest, roundtrip cost, capital gain tax not very high.

2. Countries/regions data
Its data on regions/countries is impressive.
Take for examples:
Malaysia
Singapore

"In depth" comes with overview, price history, rental yields, taxes and costs, tax on rent, buying guide, landlord & tenant, inheritance, living there, useful links, country statistics.

Regional statistics are abundant:
Sq M prices, rental yields, rents, price/rent ratio, price/GDP per cap, buy/sell costs, rental income tax, capital gains tax, price change 1 yr, price change 5yrs, landlord & tenant law, GDP per capita, GDP/cap growth 1 yr, GDP/cap growth 5 yrs, economic freedom, ec. freedom 5 yrs, competitiveness, property rights index, currency +/- value… Wow !

These indicators set me thinking what residential property investors need to look at.

3. Directory
It has directories of realtors, accountants, lawyers, foreign exchange, mortgages.

4. School of Profit
In its School of Profit, it has 2 guides that are insightful for residential property investors and real estate academics respectively:

• Guides to making money in residential property investment
• Guides to the academic literature

5. Rating

The website even has rating on countries, much like bond credit rater S&P, Fitch, Moody’s but it is on residential estate.

6. Real estate news
Its real estate news have a more local insights on specific countries.

7. Email subscription
There is a free email newsletter for subscription.

My genereal views:

I like the presentation of data of Global Property Guide. It tells you date of data used, sources of data, assumptions etc..

Beware though that the date of data may not be the most updated ones. Probably Premium Data subscription may have a more updated data.

Look at the assumptions too. Most of the times it is assuming the residential property investor is a foreign investor, for e.g. in tax, cost etc. If you are a local investor, you may need to adjust on that.

A great one-stop resource on global residential property investment indeed !

Crowdsourcing on knowledge, example : best source of business / investment news in a country

(This is the elaboration on Mahalo Answers that I mentioned in the comment of this post.)

For foreign investors, one of the major drawbacks is :

• the investors are not familiar with where and how to get updated local news related to business/investment aspect of that country. He may be disadvantaged on information aspect.

It will be good if I can find these insights/resources from Mahalo Answers’s community. Hopefully there are locals that can point me to relevant information sources.

So I ask this questions in Mahalo Answers:

• What is the best source (in English) of business / investment news in:
  Middle East, Australia, India, France, Germany, UK, Brazil, Russia…etc...(respectively) ?

Some of the questions are not answered, some yielded great, insightful answers, for examples:
India, UK, Australia.

The most insightful answer comes when I ask on Middle East.
This answerer saves me the need to ask similar question again, country-by-country.
A great "thank you" to him/her.

His/her answer is on EINnews.
Take a look at EINnews.

It provides access to breaking news, organized within 300+ countries (classified under Europe, Asia Pacific, Middle East, Russia & CIS, Latin America, Africa, North America), regional, US states and specialised topics (in categories of industry, business & economy, government & politics, miscellaneous).

Wow, that’s amazing !

Mahalo Answers is also a venue to seek valuable local opinions/surveys.
Some examples that I have asked:

• "For Mahaloians in US, have you observed "green shoots’ in US economy, in real life ?"
• "For Mahaloians in US, will option ARM reset incur a big financial burden to your family ?"

I have also learnt a lot from others’ Questions. This widens my horizon.

Mahalo Answers has widgets that can be put on blog, showing Answers by me to others’ Questions. I have removed the "Mahalo Answers Widget" from this blog since this blog is already too cluttered. However, I still put up the widget on my Innovation For the Future blog.
You may check it out.