Indonesia prints $4 billion of notes; U.S. oil prices boost EM bonds; Qatar, Turkey trade

By Christine Van Dusen

Atlanta, Jan. 8 – Indonesia printed $4 billion of new notes and Asian credits rebounded on Thursday, with high-grade cash bonds unchanged to slightly tighter and sellers emerging as U.S. oil prices rose slightly.

“We’re opening with a much firmer tone in [emerging markets] generally this morning, following yesterday’s rally in oil prices, helped by a surprise fall in U.S. crude stockpiles,” a London-based analyst said.

Oil companies from China fared particularly well, with spreads tightening 3 basis points to 5 bps and Cnooc Ltd.’s 2024s trading up.

Bonds from Malaysia firmed up, too, and South Korea’s were unchanged to 2 bps tighter, he said. Bonds from India moved 3 bps to 8 bps wider.

“The market, overall, is still very cautious, as most expect new supply to pile out, limiting room for spreads to tighten,” he said.

A lot of the day’s trading activity focused on the new issue of notes from Turkey, a $1.5 billion add-on to its 4 7/8% notes due April 16, 2043.

“The bonds opened at 99.85 first thing, bid-side, but dropped to 99 5/8 before rebounding to 99¾,” the analyst said.

From the Middle East, bonds from Qatar and its corporates led the way to firmness on Thursday morning, the analyst said.

“The oil bounce yesterday afternoon helped sentiment in the region, and Bahrain sovereign paper saw strong demand,” he said.

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