Russia bonds improve on lessened violence in Ukraine; Serbia, Croatia, Nigeria outperform

By Christine Van Dusen

Atlanta, Feb. 27 – Russian bonds, which saw weakness early in the week as fighting in Eastern Ukraine appeared to continue and the United States weighed further sanctions, improved by Friday on news that the violence had subsided.

“We have seen reports of heavy weapons being pulled back from the front line,” a London-based analyst said. “Those headlines have seen Russia rally, with credit default swaps circa 30 basis points tighter from Wednesday.”

But the fact that the United States could end up sanctioning Russian banks, their bonds moved 44 bps wider on the week, with Sberbank’s 2024s moving out by 92 bps.

“Although certain euro bonds performed better,” he said. “Corporates were 28 bps wider, on average.”

From Turkey, the Central Bank cut the benchmark rate during the week by an amount that didn’t satisfy the government, and that put pressure on the lira and pushed credit default swaps out 4 bps on Friday.

“Clearly that will raise concerns about external debt liabilities within the country,” he said.

And Serbia and Croatia bonds put in a strong week on the back of the European Central Bank’s quantitative easing program, which pushed Serbia’s 2020s 55 bps tighter and Croatia’s 2020’s 29 bps tighter by Friday, the analyst said.

Looking to the Middle East, most banks were about 1 bp wider on average by Friday, a trader said.

© 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.