Investors show caution, then confidence; Sharjah ticks higher; Isbank widens; Lat-Am performs

By Christine Van Dusen

Atlanta, Jan. 21 – Emerging markets investors were cautious on Thursday morning – as oil prices remained low and the European Central Bank was set to make a policy decision – but later in the day felt more confident and returned to buying.

In trading, the new issue from the Emirate of Sharjah – $500 million 3.839% notes due in 2021 that priced Wednesday at mid-swaps plus 250 basis points – moved up a quarter-point on Thursday morning, a trader said.

HSBC was the global coordinator and Bank of Sharjah, Barclays, Commerzbank, Dubai Islamic Bank, HSBC and Sharjah Islamic Bank were the joint lead managers and bookrunners for the Regulation S deal.

From Latin America, bonds from Panama started the day with a “better tone,” a London-based trader said. Buyers were spotted for the sovereign’s 2024s and 2053s.

At the end of the session, Brazil’s five-year credit default swaps spreads closed at 502 bps from 506 bps, while Mexico’s moved to 206 bps from 213 bps.

“Cash prices do very well today as the U.S. Treasury selloff is offset by spread tightening,” a New York-based trader said.

High-yield names from the region also performed well on Thursday, with Venezuela and PDVSA’s bonds moving higher. Venezuela’s 2027s closed at 34 from 33 while PDVSA’s 2017s finished at 42 from 40.

“Client flows were on the lighter side today, although Street volumes did pick up,” he said. “Hopes are that we can get through the overnight session with positive momentum.”

Mexico-based Petroleos Mexicanos SAB de CV “caught a bid, with lots of buying from locals and retail and private bank accounts in size,” another trader said. “Colombia was also roughly 10 bps to 15 bps tighter.”

Isbank in focus

Investors were keeping an eye on Turkey-based Turkiye Is Bankasi AS (Isbank) after an economic advisor to the country’s president called for nationalization of the bank, which is 28%-owned by the opposition Republic People’s Party (CHP).

The ruling Justice and Development Party (AKP) seems to be going “a step further to weaken the CHP and affiliated organizations,” the strategist said. “AKP officials have intended to weaken companies for their political stances in the past, although we don’t think that the nationalization of Isbank would be a rational or realistic scenario.”

In response, Isbank’s bonds traded 20 bps wider, in line with other Turkish banks.

DP World, Eskom in demand

In other trading on Thursday, names like DP World and Eskom Holdings got some attention, a trader said.

“Maybe some of the move is short-covering, but as hard as it can be to sell – try buying when the ‘relief’ rally becomes a real vice-like grip squeeze,” he said.

Bank KEB Hana does deal

In a Wednesday deal, PT Bank KEB Hana Indonesia sold $300 million 2½% notes due Jan. 27, 2021 at 99.776, a market source said.

ANZ, BofA Merrill Lynch, Citigroup, HSBC, Nomura Securities, UBS and KEB Hana Global Finance were the bookrunners for the Wednesday deal.

The issuer is based in Jakarta.

© 2015 Prospect News.
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