CEE Bonds
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Investors’ fears were confirmed on Thursday when the Turkish central bank lowered its key policy rate by 425bp. Analysts joined them in saying that the move will provoke a return of inflation and damage the lira. -
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Turkey’s bonds have put up an incredible display of resilience to geopolitical shocks so far, but investors fear that an aggressive cut to the main policy rate will cause inflation to return and puncture confidence in the country’s economy.
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Czech energy distributor EP Infrastructure came to market on Tuesday morning for a seven year Reg S benchmark — its second ever bond. The bond had been announced on Monday as a dual tranche six year and 10 year.
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CPI Property Group printed a Reg S tap of its $350m 4.75% March 2023s on Monday, but some chopping and changing over the size during execution had some rival syndicate managers expressing consternation.
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The Servant of the People party was victorious in Ukraine’s parliamentary elections on Sunday. The move cements the new president Volodymyr Zelensky’s control and should allow him to pursue the reforms mandated by the IMF.
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The US has ousted Turkey from the F-35 stealth fighter programme because the country has begun receiving components of the Russian S-400 missile system. Meanwhile, the central bank’s credibility is damaged and an interest rate decision is only a week away. Does the bond market care? It seems not.
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Hazem Shawki is set to join Credit Suisse from Goldman Sachs in order to lead its investment banking operations in the Middle East, Turkey and Africa, with a particular focus on pushing further into the Saudi Arabian market.
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Turkey took delivery from Russia of the first components of its new S-400 missile system on July 12. The US is readying a new bevy of sanctions against the country, but investors say their effect will be limited.
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Naftogaz hit screens on Friday to print three year dollars and five year euros, making it to market a day later than expected.
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After one of Turkey’s strongest months in capital markets of the year, this weekend the country’s president shocked investors by firing the governor of Turkey’s central bank. While Turkish assets sold off sharply on Monday, they recovered during the week. But some onlookers are worried that the recovery reflects desperation for yield, not a reduction in risks to Turkey’s economy.
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Naftogaz had been expected to hit the market for euros on Thursday, but leads said a busy schedule of investor calls led leads to move the deal to Friday and to consider adding a tranche of dollar funding.
