MNI EM Credit Weekly

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EXECUTIVE SUMMARY

• With Middle East tensions and “higher for longer” oil prices, we sought safe harbour opportunities across EM markets. In Asia, defensive sectors like local port handlers (Adani Ports), utilities (Korea Electric), telcos (Korea Telecom), consumer foods (Jollibee), banks (Bank of the Philippine Islands), and upstream oil & gas (Pertamina Hulu) outperformed. In CEEMEA, upstream producers with expansion potential (Seplat Energy) and cash flow generative telco towers (Helios Towers) saw spread tightening. In Latin America, energy assets provided an edge: Brazil’s Prio benefited from anticipation of increased profits, while ethanol producers like Raizen may gain as it navigates a debt restructuring. Argentina and Colombia were leveraged to energy prices but have political risks that complicated the outlook. 
   
• Volatility remains the name of the game. In Asia, we see spreads outperforming other regions and issuers to announce mandates, with potential for prints absent escalation of ME tensions. In CEEMEA, we expect to see renewed interest in defensive names away from the ME. South Africa Feb CPI not a driver, while CNB is exp. to keep rates unch on a more cautious stance. In LatAm, earnings due for protein processors Marfrig and Minerva and regional McDonalds franchisee Arcos Dorados that are unlikely to change stable credit profiles. We also hope to hear news of a CSN secured loan agreement which would provide liquidity relief but subordinate unsecured bondholders.
   
• Sovereigns mentioned: KOREA, INDON, MONGOL, NGERIA, SOAF, TURKEY, IRAQ, KENINT, ARGENT, COLOM
   
• Corporates mentioned: ADSEZ, BJCONS, BPIPM, CHJMAO, CHPWCN, EIBKOR, FOSUNI, FUTLAN, GRNCH, ICBCAS, JFCPM, KOREAT, KORELE, LGENSO, LNGFOR, PERHUL, RILIN, RIOLN, VNET, ARAMCO, MAADEN, BEXBAH, QPETRO, BINHLD, DPWDU, HLSTWR, KOS, SEPLLN, OCPMR, PKNPW, RAIZBZ, CSN, TRAGAS, CSANBZ, UGPABZ, RAILBZ