MIDDLE EAST & TURKEY
Turkish residents failed to heed to President Erdogan’s urges to keep their savings in lira, instead continuing to buy up hard currency. Turkish deposits in FX for individuals and companies excluding banks rose for a third straight week, signalling a lack of confidence in the lira, which has been one of the worst performing currencies worldwide in 2016.
Risks in the Turkish banking sector are rising according to Moody's. The rating agency said non-performing loans held by the country's banks are on track to exceed 4% by the end of this year - which is low relative to other Emerging Markets but nominally high for Turkey - and could weigh on investor sentiment around the country's banks, which are its largest issuers of debt beyond the government.
National Bank of Abu Dhabi (NBAD) raised US$885mn through the sale of a 30-year Formosa bond in January, it said on Monday. The issue, which was placed with institutional investors, follows NBAD's inaugural US$696mn Formosa bond in October, the first 30-year Formosa bond from the Middle East and North Africa, and brings total issuances by the Middle Eastern bank to US$1.5bn.
The recent boom in oil prices in the aftermath of the OPEC agreement showed signs of weakening, as prices fell to US$54 a barrel, with spike in U.S. drilling countering effects of the production cut. Futures slid as much as 0.8% in New York after rising 3.2% the previous three sessions. Meanwhile, Kuwait’s governor to the Organization of Petroleum Exporting Countries announced on Monday that oil producers from Saudi Arabia to the United Arab Emirates are currently complying with production cuts promised last year to stabilize the market.
Saudi Arabia’s government increased tax on imported poultry products, dealing a blow to Brazilian poultry exporters - which send about 17% of their exported poultry to the GCC country.
Representatives of West African states are to meet in the Nigerian capital on Monday to discuss the future of Gambian President Yahya Jammeh, who refused to step down after losing the recent election. Nigerian President Muhammadu Buhari will meet his Senegalese and Liberian counterparts in Abuja, according to a statement e-mailed by the Nigerian presidency, quoted by Bloomberg.
Mauritius’ inflation rate rose to 2.3% year-on-year in December from 2.2% in November, the country’s statistics office said on Monday.
The Nigerian Government, which faces a widening deficit and growing debt servicing costs, plans to auction roughly NGN430bn in 10-year local currency bonds in March this year, it said this week.
Venezuela's President Nicolás Maduro on Sunday hiked the minimum wage by 50%, a move that aims to ease the ongoing economic crisis and stave off hyperinflation. After another of multiple increases through recent years, the minimum wage of Venezuelans has reached 40,683 bolívars a month, which equates to around US$12 in black market prices.
The Government of Peru passed a law to lower VAT rate by one point to 17% starting July 1. The reduction can only go into effect if revenues from the tax equal at least 7.2% of GDP in the 12 months through May 31.
Pampa Energia is looking to follow the footsteps of Argentina’s sovereign in issuing a dollar bond while market conditions are favourable. The Argentine firm has hired Citi and Deutsche Bank as bookrunners, while Credit Agricole and Santander have joined as co-managers, for a potential 5 to 10-year bond that could go as high as US$1bn.
Metro de Santiago is to start marketing a new dollar bond this week, which could carry a tenor of up to 30 years. Bank of America Merrill Lynch and JP Morgan are managing the trade.
Dominican Republic-based airport operator Aeropuertos Dominicanos Siglo XXI (Aerodom) is to start marketing a dollar bond in the US this week as it looks tio consolidate existing debt. JP Morgan and Scotiabank are managing the trade, according to Reuters.
Energy transmission firm Neoenergia may be looking to issue its debut dollar bond this month, sources with knowledge of discussions suggest.
Brazilian bioenergy company Raizen has picked five banks to manage a dollar bond issuance planned for later this month. Bank of America Merrill Lynch, Bradesco, Citigroup, JP Morgan and Santander have been chosen to manage the trade.
The Government of Honduras is roadshowing a US dollar bond this week. Bank of America Merrill Lynch and Citi are managing the bond sale.
Argentine power company Genneia is looking to raise up to U$350mn in 7-year notes, wrapping up roadshows in the US this week. Bank of America Merrill Lynch, Itau and JP Morgan are managing the sale.
Brazil's Fibria Celulose is to resume roadshowing a possible green bond this week. The company originally put the sale of the 10-year notes on hold after prices spiked following the US election.
Petrobras is reportedly prepping another dollar bond sale as it announced a US$2bn bond buyback this week, which will see the firm buy back notes maturing in Jan. 2019, March 2019, April 2019, Jan 2020 and March 2020. The company currently has over US$10bn in outstanding securities.
RUSSIA, CIS & EUROPE
Georgia's total foreign exchange reserves fell to US$2.75bn in January, from US$2.78bn a month earlier, but up from US$2.52bn a year ago, the Central Bank said on Friday. The bank sold US$280mn on the FX market to support the lari, while buying around US$278.35mn in the same period.
China’s two biggest state firms are planning to undergo partial privatization as the Chinese government looks for ways to increase the efficiency of the public sector amid capital flight concerns. But as rail operator China Railway Corporation and weapons manufacturer China North Industries Group look to private investors, many analysts believe the move to be a “half-measure” that signals the government’s desire to maintain control over its strategic assets.
China’s foreign currency holdings fell for a sixth straight month in December according to figures from the People's Bank of China (PBOC), bringing last year’s drop to US$320bn. Reserves also decreased US$41.1bn.
China's Air Products & Chemicals Inc. will look to acquire all the outstanding shares of Yingde Gases Group Company Limited, the companies said Monday. The news temporarily gave a boost to Yingde Gases' Eurobonds.
China Orient Asset Management Co Ltd. plans to raise about US$1.5bn ahead of a planned initial public offering (IPO) in Hong Kong, according to a report from Reuters. The distressed debt manager last issued a US$650mn 5-year bond as part of the company's MTN programme in August 2016.
Taiwan’s trade closed the year with higher-than-expect growth in both directions and a larger-than-expected trade balance. Exports grew 14% year on year in December to US$25.7bn, marking an improvement on the 10.4% forecast by economists.
Indonesia has barred investment bank JPMorgan Chase & Co from submitting an underwriting proposal for its next US dollar sukuk, a finance ministry official said on Monday. Meanwhile, the Indonesian government announced plans to tighten regulation in the bond market, hoping to ensure primary bond dealers produce only "factual" research.
Philippines' Ayala Corp plans to issue PHP10bn (approx US$202mn) in 8-year bonds as part of a PHP20bn bond programme, the company said this week. The company, which tapped BPI Capital Corp., China Bank Capital Corp., and PNB to manage the sale, could issue as early as the beginning of February.