Russia bonds improve; Gaz Capital sells notes; Lat-Am, Africa, Central Europe bonds suffer

By Christine Van Dusen

Atlanta, Nov. 10 – Russia’s Gaz Capital SA printed new notes – capitalizing on the Russia-friendly environment created by the election of Donald Trump as president of the United States – on a busy and volatile Thursday for emerging markets assets.

Many emerging markets bonds on Thursday saw “huge inquiry and flow, dominated by [exchange-traded fund] accounts all looking for the door,” a London-based trader said. “We risk falling into a vicious circle of outflows and trapped longs up against a dealing community either light or trying to protect their year. Two U.S. holidays this month won’t help liquidity either.”

Setting the stage for Gaz Capital’s new €1 billion 3 1/8% loan participation due 2023, Russia outperformed on Thursday, with its 4¾% notes tightening 10 bps since Tuesday.

Ukraine’s 7¾% notes due in 2026 widened significantly as investors worried that the United States could change its policies toward the sovereign.

Latin America continued to be the clear underperformer, given the rhetoric on global trade and immigration, a London-based analyst said.

From Poland, investor sentiment improved slightly on the news that the central bank is likely to keep the rate at 1½% throughout 2017.

Bonds from Africa, Lebanon and Central and Emerging Europe were “all pummeled lower” on Thursday, another trader said.

“South Africa, in particular, was taken to the woodshed,” he said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.