Morning Commentary: Qatar National Bank to buy stake in Finansbank; Indian bonds could decline

By Christine Van Dusen

Atlanta, Dec. 22 – Emerging markets investors were keeping an eye on Qatar National Bank SAQ after the lender agreed to buy the National Bank of Greece SA's stake in Turkey-based Finansbank AS.

“Saw buyers on the news on the open,” a London-based trader said.

After the deal is done, Finansbank’s 2017s should trade at 103.10 bid, a London-based trader. The bonds on Monday closed at 101.62 bid, 102.12 offered.

Finansbank 2019s could trade at 105.43 bid, he said, after closing on Monday at 103.12 bid, 103.88 offered.

In other trading, India's bonds could be affected by the slowdown in the sovereign’s growth, which could lead to a substantial increase in borrowings, according to a report from Schildershoven Finance BV.

“Fiscal situation is one of the main drivers for the country’s capital market,” the report said.

The Indian bond market could “continue to decline on concerns about slowing economic growth that may put the budget deficit target at risk,” Schildershoven said. “The country’s finance minister stated the government might have to reassess its fiscal projections for the year starting April 1. Such comments came after policy makers reduced their estimates of economic growth later this month.”

And Brazil’s bond market remained under pressure on Tuesday morning as investors wondered what impact the new finance minister would have on fiscal policy.

“The new finance minister comments didn't inspire investors’ confidence,” Schildershoven said. “It is difficult to predict future dynamics on this side. Investors should be prepared for growing volatility.”

From Turkey, sovereign cash has traded in a tight range so far this week while banks have traded well, with buyers of some senior notes, a trader said.

Corporates, meanwhile, have seen some real-money investors buying up paper.

Looking to Ukraine, trading has been slow so far this week “as a holiday mood is firmly taking hold,” said Fyodor Bagnenko, a fixed income trader with Dragon Capital.

Corporates have seen some small flows, he said, while sovereigns have ticked lower on little trading.

© 2015 Prospect News.
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