Market ignores unrest in Gaza Strip, Ukraine; Russian bonds dip then recover; Lithuania up

By Christine Van Dusen

Atlanta, Aug. 19 – Market sentiment improved on Tuesday, even as a ceasefire between Palestinians and Israelis fell apart and violence erupted in a rebel-controlled city in Ukraine ahead of talks with Russia.

“Still, markets have reached a point of desensitization, where the broad rally continues for the time being,” according to a report from Commerzbank.

On Tuesday morning, Russian sovereign bonds declined only slightly, with the 3½% 2019 notes that priced at 99.195 trading at 99.38 bid, 99.88 offered after Monday’s level of 99½ bid, par offered.

Later on Tuesday, the notes recovered to 99.55 bid, 100.05 offered.

The sovereign’s 4 7/8% notes due 2023 that priced at 98.162 were spotted Tuesday morning at 99.95 bid, 100.45 offered after trading on Monday at 100¼ bid, 100¾ offered.

Later on Tuesday the notes moved back up, this time to 100½ bid, 101½ offered.

Russia’s 3 5/8% notes due in 2020 traded early Tuesday at 101.44 bid, 101.94 offered after Monday’s 101¼ bid, 101¾ offered. The notes priced at 99.533. Later on Tuesday the notes were spotted at 101½ bid, 102 offered.

So far this week, sovereign bonds from Ukraine have dipped, with the 2023s spotted at 89.80 bid, 91.10 offered, according to a report from Eavex Capital.

And Ukraine-based poultry producer MHP SA’s 2020s, which priced at par, this week have moved to 85.70 bid, 87.10 offered, the report said.

Meanwhile, bonds from the Middle East put in another firm session, with high-grade names in Abu Dhabi benefitting the most, a London-based trader said.

“High-yielders are, of course, a bit more of a mixed bag,” he said. “But a recent buy recommendation on Kuwait Energy and some further demand for Bahrain and Kuwait names sees these credits move higher.”

Banks in focus

Emirates Islamic Bank’s perpetual notes moved back to par bid on Tuesday morning, the London-based trader said.

And sellers were seen for Dubai Islamic Bank.

“Otherwise, the market remains as always – technical, flaky and full of game-playing,” he said. “ I hope we see some supply in September to take the sting out of the market.”

Lithuania, Turkey trade up

From emerging Europe, Lithuania’s 6 5/8% notes 2022 that priced at 99.102 traded Tuesday at 121½ bid, 122 offered.

And Turkey’s 5¾% 2024 notes that priced at 99.251 moved on Tuesday to 109.38 bid, 109.88 offered, he said.

Lat-Am corporates firm

Looking to Latin America, the session was firm but slow on Tuesday, a New York-based trader said.

Bonds from Brazil’s Petroleo Brasileiro SA (Petrobras) moved a few basis points tighter while high-grade names from Brazil remained quiet and names like Odebrecht SA caught a bid, he said.

Mexico’s Cemex SAB de CV saw its notes inch back to their previous yield range, he said.

The notes due 2019 that Chile’s Masisa SA priced at par moved up to 109½ ahead of the company’s next earnings release.

And other Chilean corporates traded well, with consistent demand, he said.

© 2015 Prospect News.
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