EM improves as investors digest Brexit vote result; Ooredoo trades higher; Lat-Am sees buyers

By Christine Van Dusen

Atlanta, June 28 – Even as investors continued trying to make sense of the United Kingdom’s decision to leave the European Union – and the United Kingdom’s sovereign ratings were downgraded – emerging markets bonds steadied and equity markets opened stronger on Tuesday.

“Markets moving very fast,” a trader said.

S&P dropped the United Kingdom’s rating to AA from AAA, and Fitch knocked it to AA from AA+.

“The two rating agencies and Moody’s have also assigned a negative outlook going forward,” a London-based strategist said. “Market reaction has however been muted, given the heavy reactions on Friday and yesterday.”

Also impacting the picture, United States rates stabilized overnight and crude oil prices ticked up, he said.

“Turkey sovereign credit default swaps trade at 257 basis points, circa 5 bps tighter, while cash is around 1 bp to 3 bps tighter,” he said.

Looking to Latin America, bonds were well-bid as risk assets saw better strength throughout the session, a New York-based trader said.

Flows for Latin American paper, overall, picked up on Tuesday, with better buyers in good size, the New York trader said.

In trading on Tuesday morning, spreads tightened for Middle Eastern bonds, another trader said.

The new issue of notes from Qatar’s Oordeoo QSC – 3¾% notes due 2026 that priced at 98.964 to yield mid-swaps plus 240 bps – traded Tuesday at 99.80 bid, 100.10 offered, a trader said.

© 2015 Prospect News.
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