Morning Commentary: Roadshow calendar for EM debt grows; Saudi Arabia spreads widen

By Rebecca Melvin

New York, Oct. 15 – Potential issuers continued to announce new deal roadshows for emerging markets debt as the existing market felt a little firmer on Monday following last week’s hard-hitting market rout. But EM debt remains jittery and is still lower for the month, according to market sources.

Saudi Arabia was a notable underperformer as investors eyed developments regarding the disappearance of Saudi journalist Jamal Khashoggi and potential U.S. response to the international situation. Turkish authorities’ claim that Khashoggi was killed by Saudi agents, and U.S. secretary of state Mike Pompeo was dispatched to the Middle East to meet with Saudi king Salmon.

The Saudi sovereign curve was “very heavy this morning, but has subsequently come back a lot,” a London-based trader said, quoting Saudi spreads 3 basis points to 5 bps wider, after being 20 bps wider earlier.

Among entities that announced roadshows were Latvia’s Mogo Finance SA, Islamic Development Bank and Indonesia’s PT Perusahaan Listrik Negara.

Mogo Finance and its group companies have mandated banks and scheduled fixed-income investor meetings regarding a proposed tap of its euro-denominated four-year notes. The European meetings are slated to begin on Thursday for a tap of its 9½% notes.

Islamic Development Bank has selected banks and scheduled a series of fixed-income investor meetings for a planned euro-denominated benchmark of five-year Islamic bonds under Regulation S.

And state-owned PLN has selected banks and scheduled a roadshow for a proposed offering of 10-year and/or 30-year dollar notes and/or seven- to eight-year euro-denominated notes.

Meanwhile emerging markets debt felt a little stronger with the iShares J.P. Morgan U.S.-dollar emerging markets bond ETF up about 0.1% at 105.93. That is an uptick from late Friday and the top of the range for the last trading week. But the ETF is still down since a downturn that began Oct. 1.

In the broader markets, U.S. technology stocks continued to move lower on Monday in a continuation of losses from last week’s plunge when higher bond yields spooked investors.

© 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.