Morning Commentary: Qatar sovereigns higher after finance minister’s comments; Ivory Coast up

By Colin Hanner

Chicago, June 12 – Emerging markets saw a general lifting from a Middle Eastern country on Monday, which, as of late, has seen anything but good news.

Qatar, the Middle Eastern country at the crux of a regional diplomatic issue that has resulted in the rapid downgrading of sovereign bonds, was generally higher on Monday, a day following comments by the state’s finance minister, Ali Shareef Al Emadi.

Qatar’s 3¼% notes due 2026 were up 3/8 point to 98.37 bid, 98.87 offered, while the 9¾% notes due 2030 followed with a ¼-point gain to 159 bid, 160 offered.

In an interview with CNBC, Al Emadi propped up the country’s situation and issued a warning for other Middle Eastern countries who cut ties with Qatar because of apparent terrorist links.

“A lot of people think we're the only ones to lose in this ... if we're going to lose a dollar, they will lose a dollar also,” Al Emadi said.

“We are extremely comfortable with our positions, our investments and liquidity in our systems.”

Elsewhere in geopolitics, completed elections in two European countries will keep chatter busy for the week ahead, a market source said, and monetary policy news in the United States could have broader implications for emerging markets.

“It will remain a busy week after the U.K. general and French legislative elections,” a market source said, adding that the Federal Reserve’s expected interest rate hike on Wednesday will most likely not bring tremendous volatility, though comments after the hike may offer a peek into the economy going forward.

In the secondary sphere, Republic of Cote D’Ivoire’s two benchmark issues that priced last week – a $1.25 billion issue of 6 1/8% amortizing notes due 2033 that priced at 98.747 to yield 6¼% and €625 million of eight-year notes, which priced at par to yield 5 1/8% – were mixed during morning trading.

The 6 1/8% notes were quoted with a 98.18 bid, 98.53 offered, lower from its post-pricing movement on Friday.

And the 5 1/8% notes were quoted at 101.56 bid, 102.56 offered, up from its par pricing on Friday.

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