EM tone improves after U.S. releases data; Transelec, Suzano, Chongqing issues see activity

By Christine Van Dusen

Atlanta, July 8 – Emerging markets investors were cautious on Friday morning amid lower oil prices, then perked up after the United States released better-than-expected payrolls data.

“Following a very solid week in [emerging markets], we are ending on a very cautious note as Brent crude prices have taken a dive below $47 a barrel, from just $50 a barrel yesterday,” a London-based analyst said during the morning.

Later in the day, the better economic numbers from the United States improved sentiment, with the data “likely to maintain the favorable market backdrop, as the asset class has benefitted from investors being underweight ahead of the UK referendum and the search for higher yields in the current low-rate environment,” he said.

In trading on Friday, the new issue from Chile’s Transelec SA – $350 million 3 7/8% notes due 2029 that priced at 98.857 to yield Treasuries plus 260 basis points – traded at 99.70 bid, 100.20 offered, a trader said.

Another new deal received some attention in the secondary market on Friday. Brazil-based Suzano Papel e Celulose SA’s new issue of $500 million 5¾% notes due 2026 that priced at 99.065 to yield 5 7/8% traded at 99.50, a trader said.

On Friday the new issue of renminbi notes from China’s Chongqing Grain Group Co. Ltd. saw strong performance in trading, a trader said. The 4.02% notes due July 14, 2019 were seen Friday at 100.65 bid, 100.82 offered.

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