Investors avoid risk; EM suffers; Pakistan, Asia outperform; Chinese lender prices bonds

By Christine Van Dusen

Atlanta, Oct. 13 – Emerging markets assets saw their recent rally wrap up on Tuesday, with China’s softer import numbers and the European Central Bank’s wait-and-see mode inspiring investors to shun risk.

“EM credit has enjoyed a pretty resilient rally, but it looks like the party is over for now,” a London-based trader said.

Cash prices for many emerging markets bonds started Tuesday’s session about 25 cents to 50 cents lower, another trader said.

Bonds from Turkey opened weak, moving 10 basis points wider in the belly of the curve, he said, while Turkish banks and corporates softened after Saturday’s bomb blast in Ankara.

Trading of Latin American assets, meanwhile, was “timid” and “slow,” a New York-based trader said.

“Volumes on the lighter side today, with better sellers of Latin American paper throughout the afternoon,” another trader said.

Pakistan’s bond curve was “holding fairly firm” on Tuesday, “even with weaker market backdrop,” another trader said. “Seeing flow stall here though, from better buying.”

Asian bonds were also firm on Tuesday, with investment-grade financial companies moving 1 bps to 3 bps tighter, a trader said.

The final book for the notes China Construction Bank priced on Monday – RMB 1 billion 4.3% notes due 2017 that priced at par – drew a final book of RMB 5.5 billion from 72 accounts, a market source said.

© 2015 Prospect News.
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