Morning Commentary: Middle East, Africa sees strong market tone; new Gabon tap improves

By Rebecca Melvin

New York, Aug. 8 – Emerging markets saw a positive tone in the Middle East and Africa regions on Tuesday where the Gabonese Republic priced a small tap and investors watched political developments including Kenya’s presidential elections and debate on a no confidence vote on South Africa president Jacob Zuma.

The new Gabon 6.95% notes due 2025, of which $200 million priced at 100.587 to yield 6.85%, improved 5 or 6 basis points after the break, a London-based trader said.

Investors were awaiting news on the South Africa no confidence vote and the Kenya elections underway, which were still too close to call.

On Monday, South Africa’s sovereign debt improved by 5 to 7 bps, and on Tuesday, spreads continued to hold in.

“The market is in good shape overall. All of Africa is a lot tighter in the last two weeks,” the trader said.

The Middle East was also firm with the well-received Iraq notes that priced last week trading strongly at 100.25 bid, 100.50 offered.

The one sore point was Lebanon. But there was no obvious reason for the weakness in the debt curve there, a source said.

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