EM investors ponder Trump presidency; oil prices stay on radar screens; Kexim plans notes

By Christine Van Dusen

Atlanta, Nov. 16 – The tone was cautious on Wednesday as oil prices remained a concern and emerging markets investors continued to wonder what a Donald Trump presidency will mean for the asset class.

“Market sentiment has turned more cautious, given the U.S. election outcome, the expected Fed rate hike in December and low oil prices,” a London-based analyst said. “Trump’s win has undeniably raised substantial uncertainties. Most notably, EM credit markets have been on a rout after markets started to price in a more aggressive fiscal spending agenda under a Trump administration.”

Oil prices remained on radar screens.

Looking to the Middle East, banks were trading at a premium over lenders from other regions, including North America, the analyst said.

“This is, however, justifiable given the high oil dependency in the [Gulf region], that has caused a marked slowdown in the region, and the expected ongoing issue pipeline going into next year,” he said. “We therefore don’t think that [Gulf region] bonds are per se attractive, but a number of attractive investment opportunities still exist.”

From Ukraine, bonds have seen some demand so far this week, said Svitlana Rusakova of Dragon Capital (Cyprus) Ltd.

Those notes were seen moving up one point, she said.

In deal-related news, the Export-Import Bank of Korea (Kexim) is planning to issue dollar-denominated floating-rate notes, according to a company filing.

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