MNI EM Credit Weekly: Giving Thanks to a Good Year

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EXECUTIVE SUMMARY

• We note how spreads in secondary are at or near the tight end of the range YtD despite significant primary issuance, particularly in CEEMEA. For the week, China real estate risks intensified as concerns over China Vanke’s liquidity mounted, signalling renewed pressure on the sector. In LatAm, Colombia USD bonds reverted to trading on weaker fundamentals rather than strong technical conditions.
• In Asia, focus is expected to ramp up on the China real estate sector, with markets focused on possible support for Vanke and the wider market. In CEEMEA, we await an update from the IMF on Debt Sustainability Analysis release for Senegal, seemingly the next catalyst for credit valuations. In LatAm, Honduras election results offer upside potential for bonds with a market friendly candidate victory. 

Sovs mentioned: China, Senegal, Zambia, Nigeria, Bahrain, Kuwait, Colombia, Ecuador, Argentina and Honduras.

Corps mentioned: West China Cement, Vanle, Xiaomi, BHP, China Orient, Xiaomi, Eskom, Transnet, KazMunayGas, EP Infrstructure, mBank, Anadoulu Efes, CEZ, Arabian Centres, Braskem Idesa, Raizen and Galicia.