EM starts off constructive, then widens; Petrobras sees activity; Hydoo, Pemex advance deals

By Christine Van Dusen

Atlanta, Dec. 2 – Most emerging markets assets started off Wednesday with a constructive tone – with Turkey’s bonds remaining firm but losing early gains on a spread basis as rates rallied – but later widened on commodity volatility.

This came as Russia was looking to ban imports of Turkish fruits, vegetables and poultry starting on Jan. 1, following the downing of a Russian fighter jet, a trader said.

Trading of Latin American bonds was slow at the start on Wednesday, a New York-based trader said, with light inquiries.

Still, some bonds saw some activity, including those from Brazil-based Petroleo Brasileiro SA and Vale SA.

At the end of the day, Latin American debt was wider, with Brazil’s five-year credit default swaps spreads moving to 450 bps from 447 bps and Mexico’s to 153 bps from 151 bps.

From the Middle East, some bonds were fairly active on Wednesday, but overall the market “has a real December, holiday feel to it at the moment,” a London-based trader said.

In deal-related news, China’s Hydoo International Holding Ltd. was on a roadshow for a dollar-denominated issue of notes, a market source said.

Mexico’s Petroleos Mexicanos SAB de CV has mandated Barclays and HSBC as bookrunners for a sterling-denominated issue of notes, a market source said. The Regulation S deal could come to the market in the near future, depending on market conditions.

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