Investor sentiment is turning against primary emerging market bonds. Investors’ newfound discipline, a host of new issues in the market, and a volatile backdrop has meant that several trades this week were letdowns. Now, investors are vowing to be more cautious in the coming weeks. Even if US rates are cut further, yield no longer trumps all other concerns, writes Francesca Young.
Three deals in the EM primary market were of particular concern this week.
First, Russian private bank Sovcombank printed its tier two bond on Monday at the wide end of guidance and the lowest end of the expected size range. An investor said this was a sign that the
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