Midday Commentary: Investors eye sanctions against Russia; Turkey strong; Dubai bonds slip

By Christine Van Dusen

Atlanta, April 28 - Emerging markets bonds opened weakly on Monday and then responded positively to the United States' plans for new sanctions against Russia for its activities related to Ukraine.

Russian credit default swaps opened Monday about 8 basis points wider, then tightened as the morning went on, a London-based analyst said.

"The eurobond market will try to slow the pace of decline accumulated last week, although the dynamics of quotations will be under pressure due to concerns about the imposition of new sanctions," according to a report from UFS Investment Co.

A potential collapse of the coalition in Slovenia could make matters worse, according to a report from Erste Group Research.

"The incumbent prime minister is facing a leadership challenge," the report said.

Meanwhile, bonds from Turkey stayed strong as investors pulled money out of Russia, the analyst said.

"The Middle East remains steady, and this week should see [Abu Dhabi National Energy Co.] approach the market," she said.

In trading from the Gulf region, Dubai's recent issue of 5% notes due April 30, 2029 that priced at par opened Monday at 99.625 bid, 99.875 offered, a trader said.

The notes came to the market at mid-swaps plus 177.1 bps via Dubai Investment Bank, Emirates NBD Capital, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank in a Regulation S deal.

As the morning went on, the notes slipped further, moving to 99.70, then 99.625, then 99.50 - moves that the trader found puzzling.

© 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.