EM debt ends little changed after weak start; Saudi Arabia underperforms as OPEC meets

By Rebecca Melvin

New York, Dec. 6 – Emerging markets debt ended the session at around the neutral market after a weak story on Thursday. The session was a whipsaw one for U.S. stocks. Technology names clawed back in the final hour of trade after plummeting at the open, and the Dow Jones industrial average closed down only 79 points, or 0.3%, to 24,948 after being down nearly 800 points.

U.S. Treasury yields were lower and oil prices dropped.

“Pretty weak day across the board,” a London-based market source said, citing spreads between 5 basis points and 15 bps wider for most credits in the Central and Eastern Europe, Middle East and Africa region.

Saudi Arabia was a notable under-performer, the source said, as investors focused on whether the meeting of the Organization of Petroleum Exporting Countries plus Russia on Thursday would be able to find a way to support the price of oil, which has dropped sharply since October.

The price of oil fell 22% in November and was down again on Thursday amid speculation that OPEC’s actions will not be strong enough.

Spreads for Saudi Arabia bonds were wider across the curve by approximately 12 bps and 15 bps. The Saudi 4˝% notes due 2046 were seen wider by 18.5 bps.

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