Pemex prints bonds; weak global tone hurts EM; Russian CDS widen; Kuwait Energy performs

By Christine Van Dusen

Atlanta, Oct. 3 – Mexico’s Petroleos Mexicanos SAB de CV (Pemex) sold notes on Friday, ending a rough week for emerging markets assets.

“[Emerging markets] was affected by the generally weak global risk tone this week,” a London-based analyst said. “[This was] driven by factors such as the Hong Kong protests, the Ebola case in the United States, Brazil election uncertainty, Bill Gross’ departure from Pimco, a flare-up in fighting in Ukraine, commodity price concerns and no positive surprises from the European Central Bank.”

Russia, still clashing with Ukraine, saw its credit default swaps spread move 12 basis points wider on the week while Russian banks moved out an average of 38 bps, he said.

Russian corporates widened an average of 42 bps.

Particularly weak was AFK Sistema, following the arrest of its chairman and a court’s decision to stop Bashneft Group dividends, he said. Sistema’s 2019s were 151 bps wider.

Investors were also keeping an eye on Turkey during the week, which faces a ratings review.

From the Middle East – where activity was light, ahead of the Eid holidays – the week’s best-performing bond was Kuwait Energy’s 2019s, a London-based trader said.

“It’s the only bond to be able to muster any real tightening of any shape or form,” he said.

© 2015 Prospect News.
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