Kuwait’s Equate prints notes; EM tone still solid, even amid confusion; Agrokor bonds drop

By Christine Van Dusen

Atlanta, Feb. 13 – Kuwait’s Equate Petrochemical Co. KSCC on Monday priced new notes during another solid session for emerging markets assets as investors awaited Federal Reserve Chair Janet Yellen’s testimony later this week.

“EM continues to thrive on the solid backdrop, notably ongoing uncertainty about the U.S. fiscal policy and still fairly limited supply, and despite ongoing rates volatility,” a London-based analyst said. “Things are getting a bit more complex, however, with global political uncertainty becoming a main determinant and mainly driven by concerns on European elections. This is also reflected by the increasing spreads between Bunds and several other European government bonds.”

As far as Yellen’s testimony goes, investors are looking for signs that a rate hike will come in March, according to a report from Schildershoven Finance BV.

“Any growth in hike expectations will become a trigger for market correction,” the report said. “Additionally, market is waiting for a tax program announcement by [President Donald Trump].”

The hope is that this announcement will clear up confusion.

“Understanding the implications of Trump’s policies on markets – and EM credit specifically – hasn’t gotten easier,” the analyst said.

There’s also some uncertainty related to foreign trade policy, he said.

In trading, bonds from the Agrokor Group plummeted to a record low after a Russian official said the nation might not help the Croatian company refinance its loans, Schildershoven said in a report.

© 2015 Prospect News.
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