Greece’s woes hurt EM assets; Belarus puts off deal; Pacific Rubiales takeover vulnerable

By Christine Van Dusen

Atlanta, June 29 – Emerging markets assets declined on Monday, alongside other markets, after talks between European leaders and Greece failed.

Against this backdrop, bonds from Asia made some large moves during the morning, a London-based trader said.

Asian high-grade spreads moved between 3 basis points and 10 bps wider on Monday morning amid “extremely poor” liquidity, a trader said.

Looking to Latin America, low-beta spreads moved wider as risk aversion took control, a New York-based trader said.

Notes from Pacific Rubiales Energy Corp. moved down 1 point to 2 points on Monday after a big drop on Friday, another trader said.

“Friday afternoon was ugly for the bonds, and this morning looks no different,” he said. “Only scraps trading so far.”

Clients were fairly quiet on Monday, he said, as the majority of shareholders seemed to think the takeover bid from Mexico-based Alfa SAB de CV and Harbour Energy Ltd. would fail.

For other bonds from the region – particularly those from Colombia, Mexico and Pemex – there was “very little going on,” a New York-based trader said.

In other news, Belarus is postponing its planned issue of dollar-denominated notes until 2016, a market source said. The sovereign was expected to issue the notes in 2015.

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