Risk appetite improves on China data, then sputters on oil; Finansbank deal advances

By Christine Van Dusen

Atlanta, Jan. 19 – Emerging markets bonds continued to undulate on Tuesday, first firming up – with notes from Turkey tightening as much as 10 basis points on better-than-expected China data – then softening on oil prices.

“One set of positive data does not change the backdrop that has caused this January sell-off, and some are taking the opportunity to search for bids that have been absent in the market for two weeks,” a London-based trader said.

“Fickle day that gyrated with the oil price,” another trader said.

Investors were eyeing Turkey’s Turkiye Finans Katilim Bankasi AS (Finansbank), after National Bank of Greece entered into an agreement to sell its stake in Finansbank to Qatar National Bank SAQ. The deal is expected to take place during the first half of this year.

Finansbank’s bonds tightened on the announcement but gave up some gains “amid a sell-off in EM risk since,” he said.

In deal-related news, the Emirate of Sharjah set initial talk in the mid-swaps plus 250-bps area for a dollar-denominated issue of Islamic bonds due in five years, a market source said.

Sources were whispering about a possible issue of bonds from QNB, which could be used to support its capitalization in light of the Finansbank deal.

In other news, market sources speculated that Azerbaijan could issue notes.

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