Midday Commentary: GEMS, Kipco move higher; Ukraine anxiety impacts EM bonds

By Christine Van Dusen

Atlanta, March 3 - GEMS MEA Sukuk Ltd.'s recent $200 million issue of 12% perpetual notes that priced at par hit fresh highs in trading on Monday morning, a London-based trader said.

There were "only buyers," he said.

Abu Dhabi Islamic Bank, Credit Suisse and Morgan Stanley were the bookrunners for the Regulation S deal.

The issuer is a subsidiary of Global Education Management Systems Ltd., based in the United Arab Emirates.

In other trading from the Middle East, bonds from Dubai were mixed on Monday, with the sovereign's 2022s tightening 12 bps over the week and the 2023s widening 10 bps, a trader said.

"Typically the lower-dollar-priced bond trades tighter," he said. "These are 20 points apart."

And Dubai-based Emaar Properties' 6.4% notes due 2019 that priced at par were quoted Monday at 112.75.

Al Hilal Bank, Barwa Bank, Dubai Islamic Bank, Emirates NBD Capital, HSBC, Noor Islamic Bank and Standard Chartered Bank were the bookrunners for the Regulation S-only deal.

Kipco climbs

Kuwait Projects Co.'s (Kipco) 4.8% notes due 2019 that priced at par were spotted Monday morning at 103.75 bid, 104.25 offered, a trader said.

BNP Paribas, HSBC and JPMorgan were the bookrunners for the Regulation S deal.

Ukraine in focus

In light of the continuing uncertainty in Ukraine, long-dated bonds from emerging and Central Europe are expected to sell off as money moves into short-dated bonds or out of the region, according to a report from Erste Group Research.

"The impact of the escalation in global capital markets is something it seems we've now seen countless times recently - equities down, commodities like gold and oil up, safe-haven bonds and currencies stronger," the report said.

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