Central and Eastern Europe (CEE)

Investor demand for higher yielding covered bonds from Central and Eastern Europe will likely outpace relatively moderate supply by a considerable amount. And with a wide range of debut issuers in a considerable number of new jurisdictions expected to surface, the outlook is very promising.

Equity investors have begun in recent months to allocate capital away from some of the high growth firms which dominated equity capital market supply this year to more cyclical companies that are set to benefit when economies reopen from Covid-19 lockdowns. They are also looking to buy into emerging markets, predicting rising equity valuations in places like Russia and some parts of Latin America.

The current global health crisis has surfaced an important discussion around the connection between sustainability and the broader issues weighing on our society. So, if we take one lesson away from these intersecting crises, it is that our physical and economic health, our sustainability and resiliency, and social justice are inextricably linked.

Sovcombank, one of Russia’s largest private banks, is making strides in its push to reshape Russia’s financial services marketplace. Dmitry Gusev, its chief executive, talks to GlobalCapital about the bank and its plans for 2021, ahead of a possible IPO.

Hungary has no plans to issue wholesale bonds in foreign currency markets next year, having raised more debt than expected in euros and yen in 2020.

During last January’s conference in Vienna, we felt that sentiment around CEE was mostly optimistic, but — to be frank — slightly unenthusiastic. It seemed as though everybody was expecting another solid, but ordinary year ahead. The news about the novel coronavirus in China was very distant.

Market participants agreed the US could have imposed far harsher sanctions on Turkey this week, which helped to fuel a slight rally in local risk assets on Tuesday morning.

The Russian IPO market reopened in 2020 with a number of new listings, giving equity capital markets investors a chance to once again back new listings from EMEA’s most important emerging market. The most impressive of all these listings was Ozon, the Russian e-commerce company, which listed on the Nasdaq to acclaim from global tech funds. Sources are hoping more Russian tech unicorns will follow it to public markets in 2021.

Romania will need to make progress towards fiscal consolidation once a new government is formed, according to rating agencies, as it is now dangerously close to slipping into speculative grade territory.

Ukraine, which has proven itself a favourite of emerging market investors this year, has slipped into international markets for a small dollar tap before year-end. The trade comes amid strained negotiations between Ukraine and the IMF over the disbursement of emergency funding.

With returns on developed market bonds being squeezed as never before, debt analysts are heralding emerging markets as the place for investors to be in 2021. Yet the faster the global economic recovery, the more vulnerable EM fixed income will be to what has often been its downfall: any signal of tighter global liquidity conditions, write Mariam Meskin and Oliver West.

Southeastern Europe's Montenegro sold a euro bond on Wednesday which bankers say, especially because of its timing, is simply another sign of emerging market issuers being enticed by the strong credit conditions on offer.