EM primary stays shuttered after Trump win; Russian official arrested; Mexican corporates eyed

By Christine Van Dusen

Atlanta, Nov. 15 – Deal flow remained stunted on Wednesday as emerging markets issuers and investors awaited clear signals on how Donald Trump’s presidency will affect the asset class.

Russia’s bonds, which got a boost after Trump’s win, were eyed on Wednesday after a criminal case against the economy minister was opened, alleging he took a $2 million bribe to approve the sale of the government’s 50% stake in Bashneft PJSC.

The market was also keeping watch over Mexico, which has seen its bonds struggle as a result of Trump’s campaign rhetoric about trade deals. On Wednesday, Fitch Ratings released a report that said Trump’s idea of canceling or renegotiating NAFTA could pose fairly significant risk to Mexican corporate bond issuers.

Companies like America Movil SAB de CV, Grupo Famsa and Grupo Televisa SAB stand to fare the worst, the Fitch report said.

“Over half of the 42 Mexican corporates with debt issuances in the international capital markets rated by Fitch are only moderately exposed to FX risk due to their position as exporters and large portions of their debt being denominated in dollars,” the Fitch report said. “They also enjoy mitigations to any potential negative credit impact.”

So Cemex SAB de CV, for example, would fare better because it has diversified businesses.

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