EM little changed, underperforms other risk markets; Brazil’s Hidrovias prices notes

By Rebecca Melvin

New York, Jan. 17 – Emerging markets were little changed on Wednesday but underperformed other risk markets on a day when the Dow Jones industrial average closed above 26,000 for the first time.

“I would say the day was not strong,” a New York-based trader said of emerging markets debt, adding that nothing within the space traded worse than the others, but that the market overall underperformed other markets.

The Dow’s record high was notched as a snow storm pummeled the eastern United States, and only eight trading days after it topped 25,000 for the first time. The melt up, market observers say, is coming at the expense of analysis of fundamentals and valuations.

The storm was not causing Wall Street offices to empty early on Wednesday afternoon, according to a trader, who said people were sticking it out.

Meanwhile the primary market was not overly active on Wednesday. Hidrovias do Brasil SA priced $600 million of 5.95% seven-year notes at par, but those notes were not heard to have been in secondary market trading before the end of the session.

Taking Hidrovias’ place on the forward calendar was a deal from Argentina’s MSU SA, which announced a roadshow and banks for a proposed offering of international notes. The power-related business mandated JPMorgan, Citigroup, and Itau to manage a series of fixed-income investor meetings.

Turkey’s Fibabanka AS also announced a deal on Wednesday for $500 million of five-year senior notes, with meetings being organized by Citigroup, ICBC and Standard Chartered Bank.

Also early Wednesday, PhosAgro Bond Funding DAC launched a $500 million offering of senior notes to yield 3.95%. Final terms were expected to be set late Wednesday. The Russian chemical holding company plans to use proceeds to repay its outstanding notes due Feb. 13, 2018.

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