EM picks up steam after Fed remarks; Lat-Am tightens; Pakistan in focus; Adani sets roadshow

By Christine Van Dusen

Atlanta, March 29 – Activity for emerging markets assets was somewhat subdued on Tuesday morning, then perked up after Federal Reserve Chair Janet Yellen’s remarks suggested interest rates could stay lower for a longer time.

“Volatility heightened today, as we close tighter and higher in the EM credit space,” a trader said. “Early on this morning, levels were lower and wider with bids getting hit, but Yellen’s testimony had markets reaching for risk assets globally.”

Latin American bonds were mixed in the morning – following Monday’s quiet but resilient session – then spreads tightened.

“We seemed to outperform most other markets yesterday,” a New York-based trader said during the morning. “Today we see a little weakness creeping in here and there, credit-specific.”

Pakistan received attention on Tuesday, following Sunday’s suicide bombing in Lahore that claimed 72 lives.

“The one place that seems to be busy is Pakistan,” a trader said.

The country approved payment on a $500 million bond due March 31 and saw the International Monetary Fund complete its 10th review of its three-year loan program.

Investors were eyeing Brazil-based Gol Linhas Aereas Inteligentes SA, which this week hired a United States-based financial adviser – PJT Partners Inc. – to help the airline improve its capital structure, liquidity and debt profile.

In deal-related news, India’s Adani Transmission Ltd. will set out on Wednesday for a roadshow to market a rupee-denominated issue of notes, a market source said.

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