Emerging markets hold firm; Ford helps sentiment; Argentina sees positive tone

By Paul A. Harris

St. Louis, Nov. 2 - Emerging markets held in pretty well during the U.S. session, according to a syndicate banker in New York.

Emerging markets got a lift, the banker said, when Ford Motor Co. put up a surprising third-quarter profit of $997-million, or $0.29 per share, and when it was announced that pending home sales in the United States jumped more than 6%.

"We ran out of steam around the middle of the day, as stocks reversed," the syndicate source remarked.

However emerging markets continued tracking equities, which ultimately ended the volatile Monday session in the black, and hence went out with out with a good tone.

"There has been a lot of new issue supply, so there may be just a bit of indigestion in high-yield emerging markets," the banker said, but added that supply is expected to be limited this week, which might allow for last week's burst of issuance to be cleaned up.

Earlier, at the European close, some of the benchmark high-grade five-year credit default swaps had tightened marginally during that session.

Among the sovereigns, Russia five-year CDS closed at 187.66 bps mid, 2 bps tighter, while Mexico closed at 165.53 bps mid, 3.33 bps tighter.

Likewise, high-grade corporates were seen tighter.

OAO Gazprom five-year CDS closed the European session at 247.39 bps mid, 1.38 bps tighter. Russia's VTB Bank closed 340.61 bps mid, 8.3 bps tighter.

However Brazil five-year CDS widened marginally on the European session, closing at 136.64 bps mid, 2.89 bps wider.

Among Latin American high-yield sovereigns, Venezuela notched tighter, closing at 1,027.7 bps mid, 7.65 bps tighter.

Argentina generating good sentiment

Meanwhile Argentina also narrowed marginally during the European session, closing at 1,105.29 bps mid, 1.9 bps tighter.

Later, at the close of the U.S. session, the New York syndicate banker said that there is a lot of good sentiment around Argentina.

Defaults on $20 billion of debt have sidelined Argentina, with respect to the global new issue markets. However an exchange deal from the finance ministry is said to be gaining traction, and might overcome opposition from holdouts who have opposed the exchange deal.

"That could clear the path for some issuance, at some point said the banker, who spotted Argentina five-year CDS at 967 bps bid, 1,067 bps offered, unchanged to a little tighter on the U.S. session.

Bumi starts roadshow

Elsewhere on Monday Indoneisa's PT Bumi Resources Tbk started investor roadshows in Hong Kong and Los Angeles for its benchmark-sized offering of dollar-denominated seven-year notes (Ba3/BB).

The roadshows continue on Tuesday in Singapore and Boston. On Wednesday the roadshows move to London and New York.

Credit Suisse and Deutsche Bank are joint bookrunners for the Rule 144A/Regulation S deal.

Proceeds will be used to fund capital expenditures and eventual acquisitions, provide working capital and for general corporate purposes.

Commercial Bank of Qatar to price

Elsewhere Commercial Bank of Qatar mandated Credit Suisse and Morgan Stanley to lead a dollar-denominated bond offering on Monday.

The deal from the Doha, Qatar-based lender is expected to price next week, following an international roadshow.

© 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.