Oil dips but EM solid; Lat-Am spreads tighten; Qatar sees demand; Kuwait names eye deals

By Christine Van Dusen

Atlanta, Feb. 4 – Most emerging markets assets put in a stronger session on Thursday, even as oil prices dropped amid worries that Venezuela would not be able to persuade other crude producers to cut output.

Latin American bonds opened with a better tone on Thursday, following weaker sessions earlier in the week, led higher by names like Brazil-based Petroleo Brasileiro SA and Vale SA, a trader said.

Mexico-based Cemex SAB de CV’s bonds were up a bit after the company reported its first annual profit in six years, “which the equity market is considering quite an accomplishment,” he said.

Sovereign names from Latin America ended the day with tighter spreads and some higher prices, with Brazil’s five-year credit default swaps spreads finishing at 472 basis points from 481 bps and Mexico’s at 199 bps from 203 bps.

“Cash prices were balanced for the day with a continued steepening bias seen throughout most curves,” another trader said. “Latin American high yield gains on the session, with both Venezuela and Argentina higher.”

From the Middle East, the session was “solid,” with “serious demand” for bonds on the long end of Qatar’s curve, a London-based trader said.

In deal-related news, Kuwait Finance House is considering the issuance of Islamic bonds, a market source said.

And Kuwait’s Boubyan Bank has received regulatory approval to issue $250 million of Islamic bonds, a market source said.

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