EM wider on weakness, lower liquidity; Turkey firms up slightly; Cameroon, NBO on deck

By Christine Van Dusen

Atlanta, Nov. 12 – Most emerging markets assets moved wider on the day as weakness in risk assets, commodities and currencies pushed prices lower.

Liquidity dwindled too, a London-based trader said.

“Not much change in risk over the last few days, but what is starting to trend is the drop in liquidity,” a trader said. “I still think it makes sense to be light on risk at current levels, given the uncertainty that lies ahead.”

From Turkey, sovereign bonds firmed up slightly as “investors become more neutral on the credit, post-elections,: he said. “Turkey banks are in consolidation mode.”

Corporates, he said, “are gappy, with not much going on.”

Nearly all bonds from Latin America were caught up in Thursday’s weakness, a New York-based trader said.

“Overall liquidity is holding in OK, but all credits are lower, to varying degrees,” he said.

Also on Thursday, market sources were whispering about a possible $2 billion issue of bonds from Iraq in the first half of 2016. The sovereign postponed plans in September.

Cameroon launched a $750 million issue of notes due in 2025 at a yield of 9¾%, a market source said.

The notes were initially talked at a yield in the 9¾% area.

National Bank of Oman SOAG gave initial guidance in the 7 7/8% area for a $300 million issue of perpetual notes, a market source said.

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