Tighter spreads for many EM names; oil prices, rates sell-off help tone; roadshows ahead

By Christine Van Dusen

Atlanta, Oct. 7 – Emerging markets assets tightened on a mostly calm Friday amid support from oil prices and solid inflows.

That, plus the sell-off in rates, were “combining to tighter spreads, for the most part,” a London-based trader said. “Active week, with balanced interests overall.”

Investors are keeping an eye on monetary policy, a London-based analyst said.

Turkey’s five-year credit default swaps spreads tightened by about 12 basis points into the end of the week while banks and corporates saw their bonds narrow by between 20 bps and 30 bps, he said.

In trading by Friday, Venezuela, Pakistan, Mongolia, Ecuador and Ghana were outperformers, a trader said.

Looking at the Middle East, bonds traded lower on a price basis, but spreads were doing “fairly well” on Friday, another trader said.

Meanwhile, the market awaits news of Saudi Arabia’s plans for issuance, he said.

In deal-related news, Russia’s Promsvyazbank OJSC will set out on Oct. 10 for a roadshow to market a dollar-denominated issue of notes, a market source said.

Also on Friday, Export-Import Bank of Malaysia Bhd. (EXIM Bank) announced that it will depart on Oct. 10 for a roadshow to market a dollar-denominated issue of notes (expected ratings: A3//A-), a market source said.

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