Morning Commentary: Sellers seen for Lat-Am names; Pakistan outperforms; Zambia gets upgrade

By Christine Van Dusen

Atlanta, Sept. 28 – Bonds from Brazil, Mexico and Petroleos Mexicano SAB de CV (Pemex) saw heavy selling and Pakistan’s new issue of notes outperformed on a somewhat quiet Monday morning for emerging markets assets.

Buyers for many names were difficult to find.

“Value, value everywhere, but not a buyer in sight,” a London-based trader said. “Plenty of EM risk that would without question offer a great one-year return, but the short-term volatility and threat of outflows is making it difficult to digest right now.”

The new issue of notes from Pakistan performed well on Monday morning, moving up 2 points from reoffer, another trader said.

The sovereign sold 8¼% notes due 2025 at par via Citigroup, Deutsche Bank and Standard Chartered in a Rule 144A and Regulation S deal.

“Strangely, we’ve seen some demand for Pakistan's 2024s,” he said. “Probably struggling to recover.”

From Africa, Zambia’s outlook was revised to stable from negative by Moody’s Investors Service as the sovereign's 2027 bonds traded at or near the lows, he said.

“Moody's is obviously not worried about default in the short-term,” he said, noting there was “no queue of buyers here.”

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