Executive Summary: EM ex-Asia credit saw a relatively quiet close despite mid-week volatility from Ukraine rally and SSA rebounds. Ukraine bonds gained +1.75pt to +2.25pt on the week after Trump’s call with Putin pausing energy strikes, while Gabon continued rallying +0.375pts on World Bank loan talks. In Asia, New World bonds surged 4-10pts on Blackstone investment rumors, offsetting softer sentiment from potential US-Iran tensions and Hutchison port issues. Overall, HY names showed dispersion with real money demand supporting select credits amid weekend risk reduction.
Market Visualizer
Regional Credit Developments
🌍 EM Ex-Asia Credit
- Ukraine: Started strong on Russia talks but retraced before rallying on Trump’s strike pause agreement. A-notes +1.75/+2.25pt, B-notes +1.5/+2.5pt, C-notes +2pt on the week.
- Gabon: SSA sovereigns continued rally with +0.375pts weekly gain on $500m World Bank loan negotiations.
- Zambia: Bonds flattened post-IMF $190m disbursement amid weaker reserve projections; SSA sovereigns rebounded +0.25/+0.625pts overall.
- Argentina: Bonds rose 0.325-1.9pts applying Ecuador’s issuance success template, plus FX accumulation gains.
- Ecuador: Ended flat/+0.25pts after profit-taking following successful primary issuance.
- Venezuela/Pdvsa: Firmed +0.10/+0.50pts on recovery potential expectations.
🇨🇳 Asia Credit: China Property & HY
- New World Development: Complex rallied sharply 4-10pts (especially perpetuals) on Blackstone shareholder investment talks, despite company denial. Strongest performer of the week.
- China Property Sector: Eased red lines boosted distressed bonds; Dalwan gained +1.5pts post-pricing on policy support.
- Indonesia HY: Dipped 25-50c on MSCI free-float adjustment concerns impacting equity sentiment.
- New PLN IJ Bonds: Mixed performance amid equity market rout but closed near reoffer levels showing resilient demand.
🌏 Asia Credit: Frontier & Sovereign
- Sri Lanka/Pakistan: Frontier sovereigns remained firm with steady real money demand.
- Vedanta: Gained on stake sale announcements improving liquidity profile.
- Biolin: Advanced on credit rating upgrade momentum.
- Bahrain: New 8Y issue actively traded, outperforming other tenors in debut.
- Romania: Dollar-denominated bonds lagged Euro equivalents in secondary trading.
Trading Flows & Technicals
Flows balanced with real money demand in Ukraine, SSA top picks, and Asia HY squeezes early week, turning selective late amid Iran strike fears and CK Hutchison weakness. Corporate standouts included LIQTEL (+2.5pts) and GeoPark (+1.25pts) gaining on strong results and M&A activity.
Week Ahead Outlook
Monitor Ukraine truce implementation following strike pause agreement, Ecuador secondary market reaction to new issuance, Argentina FX reserve accumulation momentum, and Asia equity market impacts from MSCI Indonesia constituent review. Potential US monetary policy shifts under Warsh nomination may weigh on broader EM risk appetite.
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