Weekly Update

Summary: EM ex-Asia credit remained under pressure for the week ending 13 March 2026. The dominant market theme was the divergence between oil-importing and oil-exporting sovereigns, as elevated crude prices — sustained by the ongoing Iran conflict — produced sharply asymmetric outcomes across the complex. Oil exporters outperformed broadly, while importers faced additional balance-of-payments stress. Idiosyncratic drivers — including a presidential primary in Colombia, an IMF programme request from Gabon, and a corporate restructuring filing — generated significant single-name activity alongside the macro backdrop.

🌐 Macro Theme: Oil Importers vs. Exporters

• Bifurcation: Elevated oil prices — driven by sustained geopolitical risk from the Iran conflict — produced a clear divide in EM credit performance. Oil-exporting sovereigns outperformed on the week; oil-importing sovereigns remained under pressure.
• Oil Importers Under Pressure: Egypt, Lebanon, and Turkey — all net energy importers — traded with a heavy tone. Real money selling was the dominant flow dynamic across the group, consistent with terms-of-trade deterioration concerns.
• Oil Exporters Outperformed: Venezuela/PDVSA and small EM oil-producing sovereigns rallied on the week, supported by real money demand and a broadly constructive energy backdrop. Gabon, a smaller oil producer, was additionally supported by an IMF programme catalyst (see below).
• Sector Read-Across: The oil price environment also weighed on HY airline credits — which face direct fuel-cost pressure — and contributed to a cautious tone in Dubai real estate bonds, both of which declined on the week.

🗺️ MENA

• Egypt — Underperformed: Egypt was among the weaker performers on the week. Flows were characterised by real money selling earlier in the week, with hedge fund and local demand on the other side. A mid-week technical bounce driven by hedge fund buying in the long end proved short-lived, and the curve leaked lower into the close. The long end underperformed the front end on the week. In CDS, hedge fund activity was broadly net positive on the 5-year tenor.
• Lebanon — Political Headline, Curve Lower: On Monday, Parliament voted through a two-year delay to elections — a development largely expected by the market. Initial flows skewed toward hedge fund selling before real money and hedge fund buyers emerged at lower levels. The curve closed the week lower overall.
• Dubai Real Estate — Heavy: Dubai RE bonds traded with a heavy tone on the week, declining alongside the broader cautious sentiment across the region.

🌍 Sub-Saharan Africa

• Gabon — Best Performer in SSA HY: Gabon was the standout name in the region, rallying on reports that the country formally requested an IMF programme. Healthy real money two-way flow underpinned Wednesday’s move, though profit-taking emerged later in the week. Gabon closed as the top performer in Sub-Saharan African high yield on the week.

🏛️ CEEMEA

• Turkey — Weaker; Basis Richened: The Turkish complex traded with a heavier tone, with real money and ETF selling the dominant flow, partially offset by sustained local demand. Notably, the CDS/cash basis richened on the week — 5-year CDS widened more than the equivalent move in cash bonds — a divergence that warrants monitoring.

🌎 Latin America

• Venezuela / PDVSA — Outperformed LATAM HY: Venezuela and PDVSA outperformed within the LATAM HY sovereign universe. Real money was a net buyer across the curve, while hedge funds and locals reduced exposure. Real money swap activity was also observed across the curve.
• Colombia — Rallied on Primary Election: Colombia was a positive outlier following Sunday’s presidential primary elections. The market responded constructively to the result, with the belly of the curve outperforming. Early-week flows were dominated by real money and hedge fund demand, met by local selling, before some profit-taking emerged toward the close. 5-year CDS tightened on the week.
• Chile — Mixed Flows, Broadly Flat: Activity picked up on Thursday with mixed flow dynamics — hedge fund basis selling, real money two-way, local demand, and ETF selling all observed. The net result was a broadly flat week for Chile cash. No major directional catalyst was present.
• Argentina — Quiet Week: Warrants closed broadly unchanged. The broader cash curve was modestly lower. No significant catalysts drove directional flow; the name traded in a holding pattern.
• Raizbz — Out-of-Court Restructuring Filed: Raizbz generated significant single-name activity after the company filed for an out-of-court restructuring arrangement. Post-headline demand from real money and hedge funds pushed bonds higher initially; however, real money selling re-emerged across the belly and long end toward week-end. The 27s underperformed the rest of the curve. The curve closed materially higher overall, though the near-term outcome of the restructuring process remains the key variable.

✈️ Sector Themes

• HY Airlines — Continued Weakness: Pressure on high-yield airline credits continued through the week. Bonds declined, consistent with the elevated fuel cost environment.
• Small EM Oil Producers — Rallied: Smaller oil-producing sovereigns rallied on the week, reflecting the direct pass-through of higher crude prices to sovereign credit metrics. This cohort was among the clearest beneficiaries of the oil price environment.

📡 This commentary is compiled from internal trading desk notes and is intended for informational purposes only.
It does not constitute investment advice or a solicitation to buy or sell any security.
Information may be incomplete. Use with caution.

Gembridge Capital · Singapore · Week Ending 13 March 2026