EM tone remains cautious; Poland, Eesti Energia, China Cinda, others could issue soon

By Christine Van Dusen

Atlanta, Sept. 1 – The tone for emerging markets assets was cautious on Tuesday after China released weak economic data and investors continued to wonder whether the Federal Reserve will hike rates this month.

Asian names were a touch softer on “light volume,” a London-based trader said. “Indonesia sovereign cash is down ¼ point in the belly, and the long end is down ½ point to ¾ point.”

Spreads for high-grade bonds were mostly unchanged or slightly softer, he said.

Meanwhile, Brent crude was down 2.2% on Tuesday morning after a week of gains.

From the Middle East, the curves for Saudi Electricity Co. and Bahrain were steep on Tuesday, another trader said.

“Perpetuals are a mixed bag at the moment,” he said, “although Dubai Islamic Bank has gone better bid.”

In deal-related news, Poland is planning to price a benchmark-sized issue of euro-denominated notes due in 10 years, a market source said.

BNP Paribas, Deutsche Bank, HSBC and JPMorgan are the bookrunners for the Regulation S deal.

Also on Tuesday, Estonia’s Eesti Energia AS announced plans for a euro-denominated notes as part of a tender offer, according to a company announcement.

And market sources were whispering about the possibility of upcoming deals from India-based TVS Logistics Services Ltd., India’s NTPC Ltd. and Saudi Electricity.

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