EM remains under pressure, but China oil outperforms; Sagicor ticks up; eHi cancels deal

By Christine Van Dusen

Atlanta, Aug. 5 – Emerging markets bonds on Wednesday were steady but mixed in response to declining oil prices, weakness in U.S. Treasuries and ahead of non-farm payroll data, set for release at the end of the week.

“The opening still feels steady versus yesterday, but the macro [picture] remains soft,” a London-based trader said. “High-yield was offered and defensive credits and short-duration were holding in still. Oil importers are outperforming.”

The tone improved for Asian debt on Wednesday, though performance remained mixed, with investment-grade cash bonds moving wider or narrower by 3 basis points, a London-based trader said.

“Had some real-money buyers and short-covering, which drove the China [oil companies] and recent issues 3 bps to 5 bps tighter,” he said.

Bonds from Malaysia “rebounded nicely as oil stabilized,” he said, and closed 5 bps tighter.

“Korea underperformed, 3 bps to 5 bps wider, with sellers in the 10-year bucket,” he said.

At the end of the New York session, sovereigns were “a bit soft,” another trader said, with Vietnam’s 2024s, Philippines’ 2034s and Indonesia’s 2043s and 2045s trading lower.

Looking to Latin America, Sagicor Financial Corp.’s new issue of 8 7/8% notes due 2022 saw small volumes after the open on Wednesday, a New York-based trader said.

China’s eHi Car Services Ltd. has canceled plans for a dollar-denominated issue of notes, a market source said.

Current market conditions, as well as weak demand, led to the deal’s downfall, he said.

© 2015 Prospect News.
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