EM buyers chase same bonds; Bahrain, Kipco notes get attention; two-way flows for Lat-Am

By Christine Van Dusen

Atlanta, Aug. 12 – Buyers outpaced sellers in trading of emerging markets bonds on a mostly quiet Tuesday for the asset class.

“The Street is, of course, chasing the same bonds and offering the same bonds,” a London-based trader said. “Flows today were typically skewed to better buyers, and few bonds are nigh-on-impossible to locate.”

Investors were mostly interested in notes from Bahrain and Kuwait, including Kipco Projects Co.’s 2020s, which have moved from 124 1/8 to 126½ bid.

The London trader expects to see the primary market pick up for Middle Eastern issuers in the coming weeks.

Some perpetual bonds from the Gulf region moved higher on Tuesday, with Dubai Islamic Bank’s notes trading at 104½ and Abu Dhabi Islamic Bank trading near 105, he said.

Meanwhile, bonds from Latin America saw solid two-way flows on Tuesday, a New York-based trader said.

While low-beta names tightened by as much as 2 basis points on Tuesday, high-yielding names – like Venezuela – dipped by as much as 1¼ points, he said.

The most active bonds in Brazil were the sovereigns 2025s and 2045s, he said.

Mexico bonds were quiet during the session while flows were solid for Colombia, with its 2041s trading at 119.22.

In deal-related news, Indonesia-based coal producer Berau Coal Energy Tbk. postponed its planned issue of dollar-denominated and benchmark-sized notes due in five years, a market source said.

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