Morning Commentary: EM debt better after Turkey’s rate hike; Gulf primary market strong

By Rebecca Melvin

New York, Sept. 14 – Emerging markets debt was closing out the week on a positive note as investors have turned sanguine on the heels of Turkey’s central bank rate hike and a positive tone regarding U.S.-China trade relations.

Emerging markets were positive early Friday with the J.P. Morgan U.S. dollar Emerging Markets Bond ETF trading up more than half a percentage point to $105.98. The iShares ETF remains near the low end of its range for the year and remains down 5.5% for the year so far, but the level marks a solid improvement from early in the week.

The new issues that were priced this week, including four from the Gulf countries of the Middle East, priced well and traded up after issue, a market source said.

The week brought four new deals from the Gulf Cooperation Council, including $2 billion in 10-year sukuks for Kingdom of Saudi Arabia, and $750 million issues for Saudi Arabia’s Arab Petroleum Investments Corp. and Abu Dhabi Islamic Bank, while Abu Dhabi-based Al Hilal Bank priced a 2023 sukuk for $500 million.

The market tone is favorable for a new crop of deals next week for Gulf region, which has three more deals on the calendar.

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