EM debt weaker in light trade; Argentina struggles to stabilize; Oman, Aldar eye deals

By Rebecca Melvin

New York, Aug. 31 – Emerging markets were quiet on Friday ahead of the long holiday weekend in the United States for Labor Day, with Argentina showing some signs of stability after a dramatic sell-off of the country’s bonds and currency beginning Wednesday when president Mauricio Macri announced he is asking the International Monetary Fund to speed up the release of its $50 billion funding package for the country.

The pace of selling has slowed, but the peso and bonds continued to drift lower in a thinly traded market early Friday.

Argentina’s 7 1/8% century bonds due 2117 traded down again on Friday by more than a point to 67˝ bid, 68.20 offered. That was down from 74.10 a week ago and from 80 a month ago.

Despite the fact that the emerging markets debt market was weighed down on Friday by worries about Argentina, the new issue market has rekindled in the Middle East and Africa region with new mandates for several Gulf Cooperation Council entities.

The prospective issuers include Oman, which has reportedly mandated banks for a new issue of U.S. dollar-denominated bonds, and the United Arab Emirates’ Aldar Properties PJSC, which has selected banks for a planned sukuk, or Islamic bond, to be issued subject to market conditions, according to a market source on Friday.

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