EM bond strategy is fight not flight

A decade ago any threat of volatility anywhere within the CEEMEA bond markets would shut them down. Not anymore. Nowadays scares barely even shut those parts of the market that they most affect, as this week’s bumper bond crop shows.

  • By Francesca Young
  • 09 May 2019
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The potential for volatility has been everywhere this week. South Africa is holding presidential elections, there is a mounting threat of more sanctions against Russia, while the Istanbul mayoral election result has been torn up by the losing side and a rerun ordered. All of that has happened against the backdrop of a souring US/China trade war.  

But in the CEMMEA bond market, the deals are coming in their droves.

Whether that is down to strong inflows of cash into EM assets, or battle-hardened investors developing a tolerance for disruption, or a mix of the two, is uncertain. Maybe issuers now consider this sort of market backdrop as benign and think worse is to come.

Whatever the reason, instead of pulling back, irritated by the prospect of having to pay a few basis points more for their debt, issuers are charging ahead. 

Property developer Majid Al Futtaim printed its green bond this week, followed by South Africa mining firm Gold Fields on the day its country went to the polls. Even Development Bank of the Republic of Belarus made it back into the market to sell an international Belarusian rouble deal —EM local currency notes are a sure sign of a bullish market. 

And the pipeline is swelling — Russian Railways, Kenya, and the Eastern and Southern African Trade and Development Bank are all on roadshows.

It is an approach to issuing debt that banks have advocated to their clients for years. It is, of course, in their economic interests to do so, but it is still gladdening to see issuers experiencing the benefits.

  • By Francesca Young
  • 09 May 2019

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 222,090.35 998 8.23%
2 Citi 207,802.09 868 7.70%
3 Bank of America Merrill Lynch 172,151.11 725 6.38%
4 Barclays 162,393.55 662 6.01%
5 HSBC 133,323.28 724 4.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 27,275.91 109 7.92%
2 Credit Agricole CIB 25,517.00 104 7.41%
3 JPMorgan 21,834.93 53 6.34%
4 Bank of America Merrill Lynch 21,222.68 53 6.16%
5 SG Corporate & Investment Banking 16,639.52 78 4.83%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 7,363.27 46 9.58%
2 Morgan Stanley 7,283.40 35 9.48%
3 Goldman Sachs 6,842.44 35 8.90%
4 Citi 5,763.97 41 7.50%
5 UBS 4,691.07 23 6.11%