Kazakhstan makes return to markets; risk appetite grows, then dwindles; Brazil in focus

By Christine Van Dusen

Atlanta, Oct. 6 – Kazakhstan sold notes on Monday as emerging markets assets tightened dramatically – on news that a market-friendly candidate was elected in Brazil and the protests in Hong Kong calmed – but faded as investors digested the news.

Many bonds gave up their gains into the close. For example, bonds from Brazil started the session “furiously tighter,” with Brazil-based Petroleo Brasileiro narrowing as much as 30 basis points during the morning and Vale SA tightening as much as 13 bps, a New York-based trader said.

By the afternoon, sellers piled up, and Petrobras moved back out, as did some high-grade corporate bonds, he said.

Brazil’s sovereign bonds managed to finish Monday up about 50 cents, he said, while other high-grade names outside of Brazil firmed slightly. But volumes were low, he said.

Support for Mexico-based Cemex SAB de CV dwindled, with few sellers spotted, he said.

Meanwhile, tensions remained high in Ukraine, though major headlines over the weekend were limited, a London-based analyst said.

“Russian credit default swaps spreads are 3 bps tighter this morning, with banks also seeing spreads tighten, although a few corporate names are trading a little weaker,” he said.

Bonds from the Middle East put in a “lackluster” session on Monday, given that most of the region was celebrating the Eid holidays, a London-based 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.