EM bonds start new month under pressure after strong July; South Africa’s Eskom eyed

By Rebecca Melvin

New York, Aug. 1 – Emerging markets bonds were under pressure on Wednesday to start out the new month and as the U.S. Federal Reserve stood pat on rates as widely expected.

The weaker session, in which Turkey’s sovereign bonds extended a weeklong slide, followed on a generally strong EM bond secondary market for July, which saw positive fund flows for three straight weeks to support existing prices amid a lack of new paper.

Argentina and Petroleos Mexicanos SAB de CV were notable underperformers in the session. And Turkey’s bonds, which have been in the crosshairs of investor angst over the actions of president Recep Tayyip Erdogan that has been heedless of investor interests, were down again as the threat of U.S. sanctions loom.

Turkey’s 11 7/8% notes due 2030 were down 0.3% to 134.41 to yield 14.84% on the Luxembourg stock exchange on Wednesday. The notes, along with the rest of the sovereign curve, had a rocky month but mostly consolidated after a steep plunge in June. However, the 2030 notes have lost 1% in the last five sessions.

The proposed dollar bond from South Africa’s Eskom Holdings SOC Ltd. was not forthcoming during the session but was expected to price on Thursday, a London-based syndicate source said.

The Johannesburg-based state-run utility is planning a government-guaranteed tranche and a non-guaranteed tranche.

© 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.