Qatar Islamic Bank sets roadshow for sukuk; softer session for most EM; Lat-Am CDS widen

By Christine Van Dusen

Atlanta, Oct. 14 – Qatar Islamic Bank SAQ announced plans for a roadshow as bonds from Turkey were unchanged, Pakistan’s notes firmed up and Asian assets put in a quiet Wednesday session.

The Doha-based lender will issue dollar-denominated and benchmark-sized Islamic bonds via Barwa Bank, Citigroup, HSBC, Noor Bank, QInvest and Standard Chartered in a Regulation S deal.

“Markets again looking a touch softer after more weak data from China,” a London-based trader said. “The weak data has spurred more speculation that the PBOC will ease again before year-end, but I think expectations where somewhat baked in already.”

Bonds from Turkey opened almost unchanged on Wednesday, away from the wides seen on Tuesday, he said.

“I guess the Turkey short is probably getting a bit crowded, as it remains a consensus underweight, but there are plenty of reasons for why investors should be positioned that way,” he said. “Turkey banks and corporates were orderly, as sellers meet Street shorts, so we are not having the bottom-falling-out that we experienced a few weeks ago, when some of the corporates went almost no-bid.”

Pakistan’s curve remained mostly firm on Wednesday, though flows stalled, a trader said.

“The curve has almost normalized, apart from the Pakistan 2019 sukuk, which remains super-expensive,” he said.

Trading of Asian bonds was quiet during the morning session, opening soft but firming as real-money accounts selectively added corporate issues, a trader said.

“Bonds are 1 basis point to 2 bps tighter,” he said. “Also seeing interest in the laggards in the Korea space.”

Petronas quiet, wider

Bonds from Malaysia’s Petroliam Nasional Bhd. (Petronas) were mostly quiet and widened by about 2 bps amid some Street selling, he said.

“The tone in Asian credits remained constructive today, with investment grade financials closed unchanged to 3 bps tighter,” he said. “Korea financials grinded tighter, with off-the-runs catching up. India banks 1 bp to 3 bps tighter.”

Petrobras, Vale suffer

Looking to Latin America, many corporates put in a decent performance on Wednesday morning, but Brazil-based Petroleo Brasileiro SA remained under pressure, a New York-based trader said.

Brazil’s Vale SA also widened on Wednesday after moving 10 bps out on Tuesday.

Street volumes remained strong for Colombia-based Ecopetrol SA’s curve, particularly the 2026s and 2045s, he said.

Colombia, Mexico, Cemex firm

Bank paper from Colombia and Mexico remained firm amid better sentiment, the New York trader said.

Mexico-based Cemex SAB de CV was also firm on Wednesday, he said.

“Other Mexican high-grade issues also remain firm, but I’m not sure they are ready for another leg higher here as valuations ... are keeping a lid on performance,” he said.

Swaps move out

At the end of the day, Brazil’s five-year credit default swaps spreads closed at 452 bps from 450 bps after trading as tight as 440 bps earlier in the session, another trader said.

Mexico’s credit default swaps moved to 161 bps from 156 bps while cash prices for most Latin American sovereigns tried to adjust to spread and Treasury moves.

High-yield names from the region did manage to eke out gains, with PDVSA’s 2017s closing at 68.60 from 68.50 and Venezuela’s 2027s closing at 42.50 from 41.70, he said.

“Volumes continue to be on the lighter side despite the pickup in volatility, with two-way flows,” he 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.