Investors embrace risk; Greece inches closer to bankruptcy; Sinopec, Pelindo, FirstRand active

By Christine Van Dusen

Atlanta, April 24 – Risk appetite increased for emerging markets investors on Friday, with good two-way flows seen for many bonds, even as Greece appeared to moving closer to bankruptcy.

“Overall, the tone remains positive,” a trader said.

Indeed, the market was embracing Brazil’s Petroleo Brasileiro SA and Brazil-based Vale SA, with the latter’s bonds tightening as much as 25 basis points into Friday, a New York-based trader said.

“Overall risk-on mood, Petrobras and Brazil high-grade are grinding higher and iron ore supply and expansion is suddenly slowing, sending prices markedly higher,” he said. “Clients continue to be better buyers.”

Looking to Asia, most names ended the week on firm footing, with high-grade cash unchanged to a couple of basis points tighter, a London-based trader said.

“New issues remained in focus as Asian accounts trimmed risk ahead of the weekend,” he said.

Investors were still paying attention to the new five-tranche issue of dollar- and euro-denominated notes from China Petrochemical & Chemical Corp. (Sinopec Group).

The new two-tranche issue of $1.6 billion notes from Indonesia’s PT Pelabuhan Indonesia II (Persero) (Pelindo II) opened at reoffer on Friday but “quickly dipped as fast money sold,” a trader said.

The $1.1 billion 4¼% 10-year tranche drew an order book of $4 billion from 245 accounts. The $500 million 5 3/8% 30-year tranche had a final book of $1 billion from 80 accounts.

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