CEE Bonds

Kirill Dikijs, formerly of BNP Paribas, has started in his new emerging markets DCM role.

It has been a dreadful August in emerging markets, but borrowers still have cash to raise and, despite the violent swings in secondary market levels, investors will have cash to put to work when the UK bank holiday has passed.

Polish bank mBank is embarking on a roadshow to market the first euro denominated international public bond from the CEEMEA region in over a month, and the first since Turkey’s currency crisis triggered a wave of selling across emerging market debt.

Sberbank is merging its corporate banking and Sberbank CIB divisions and plans to complete the integration by the end of 2018, with deputy chairman Anatoly Popov heading the combined entity.

It’s been a turbulent summer in emerging markets, but borrowers in the Middle East in particular are already eyeing their return to the market.

New US sanctions announcements on Russia, chatter around new IMF financing for Angola and a desperate economic recovery plan in Venezuela are keeping those emerging market portfolio managers still at their desks busy. But low volumes are playing havoc with EM secondary levels as traders embrace the quietest trading week of the summer.

Amid the chaos in Turkey, bankers are pitching bond buy-back opportunities to the country's beleaguered banks. Many argue that those in a position to take them up should be looked upon favourably by investors. The problem is, those investors might not even notice.

Two rating agencies lowered Turkey’s credit rating on Friday evening, but the beleaguered nation’s asset prices have largely shrugged off the news, despite predictions of a recession.

The sovereign credit crisis spurred lawmakers to undertake a number of major initiatives designed to sever the ‘doom loop’ — the link between sovereign and bank credit risk. Recent events in Italy and Turkey show the limits of these policies, but not their impotence.

Emerging market currencies and bond yields were battered this week as old school contagion — the like of which has been absent for many years — infected the market as the Turkish lira crashed. But there is hope that a bounce back for many of these countries could be imminent, as it was after the 2013 taper tantrum. Francesca Young reports.

Banks with major exposures to Turkey were getting hammered after a loss of financial market confidence pushed the country towards a crisis at the beginning of the week. But analysts suggest that any fears of contagion into the European banking sector are overdone.

Within a fortnight, the Republic of Turkey is planning to announce “additional sources of financing” to fill a $2.5bn gap in its 2018 external bond funding plans, Berat Albayrak, the country's finance minister, said on an investor conference call on Thursday afternoon. Albayrak also said Turkey is not in talks with the International Monetary Fund (IMF) and ruled out capital controls.