EM spreads tighten amid weaker Treasuries, but give some on trade fears; Gulf supply eyed

By Rebecca Melvin

New York, Sept. 7 – Emerging markets debt spreads tightened early on Friday, benefiting from a move lower in U.S. Treasuries after the U.S. payrolls report; but gains were trimmed later in the session after U.S. President Donald Trump announced he is ready to impose tariffs on an additional $267 billion of Chinese goods.

New supply, which was not forthcoming this week, is anticipated next week from the Middle East Gulf Cooperation Council. There are four likely corporate deals on the calendar from the Gulf Cooperation Council, including those from Al Hilal Bank, Abu Dhabi Islamic Bank, Aldar Properties PJSC and Arab Petroleum Investments Corp., or Apicorp.

Al Hilal and ADIB held fixed-income investor meetings this past week in London and the Middle East for sukuk, or Islamic bonds. Aldar, the Abu Dhabi-based real estate company, announced the previous week that it intends to issue a sukuk. And Apicor has mandated banks to arrange a series of fixed-income investor meetings a five-year, U.S. dollar benchmark of notes.

But Oman has not mandated banks for a new issue. Instead, a deal for the National Bank of Oman SAOG is on the table, a London-based trader said.

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