Emerging markets solid, slow post-Easter; MOL, DEWA plan deals; Itau, Nomos could price next

By Christine Van Dusen

Atlanta, April 5 - Emerging markets continued to be somewhat slow but stable on Monday as Europe remained on Easter holiday and investors responded positively to the improved job numbers released Friday by the U.S. Department of Labor, market sources said.

"It's stable, and things are good," a New York-based market source said.

An emerging markets strategist agreed.

"The markets are doing pretty well," he said. "On the back of last week's payroll numbers, spreads are compressing across the board as [Treasury] yields rise. What's amazing is that it's not having much of a negative effect on prices."

Prices, he said, "are higher or flat" in response to the U.S. Labor Department's report, released on Good Friday, which showed the economy had created 162,000 jobs in March - a figure that fell short of analysts' expectations but was still the biggest increase seen in several years.

"Investors are reacting positively to the latest news," the strategist said. "Why sell at a loss now? The news is positive for the overall economy and growth and trade."

Prices have "hung in there very well," even in light of the less-than-stellar results of last month's Treasury auctions, the New York source said. Monday's sale of an $8 billion addition to the existing 10-year Treasury Inflated Protected Securities received much more demand.

Spreads among the bigger Latin American countries are "tighter by 10 basis points in the last three or four sessions," he said. "That's on light volume. It was a light week last week and then today Europe had a holiday."

The market was closed in London for Easter, so there was "no real activity," another market source said.

Things should pick up as the week goes on, however. The next deal to come to market will likely be Brazil-based Itau Unibanco's planned 10-year tier 2 notes via Goldman Sachs, Itau and Morgan Stanley, the strategist said.

"That's expected to be the first bond issue of the week, maybe by Friday," he said.

Another deal that's expected to come to market this week: a euro-denominated, benchmark-sized issue of notes from Budapest-based MOL Hungarian Oil and Gas via BNP Paribas, Deutsche Bank, RBS and Unicredit. "That's expected any day, possibly by Friday," a market source said.

And Dubai Electricity and Water Authority's planned issue of dollar-denominated bonds or sukuk offering also is expected "any day" at a size of $250 million to $500 million, he said.

Also coming soon, the source said, is Moscow-based Nomos-Bank's planned issue of notes.

UBS, VTB Capital and Nomos-Bank are the bookrunners for the deal from the private lender, which may come "next week," the source said.

MOL plans notes

MOL Hungarian Oil and Gas (expected BB+/BBB-) is planning a euro-denominated, benchmark-sized issue of notes, according to a market source.

BNP Paribas, Deutsche Bank, RBS and Unicredit are the bookrunners for the deal.

The deal is expected to come to market "any day," the source said.

MOL Hungarian Oil and Gas is a fuel distributor based in Budapest.

DEWA may sell notes

Dubai Electricity and Water Authority (DEWA) is planning an issue of dollar-denominated bonds or a sukuk offering, a market source said.

"It might be $250 million to $500 million," the source said. "It's expected any day."

No other details on the deal were available Monday.

DEWA is a state-owned utility company.

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