Emerging markets poured into the debt market yesterday with a flurry of bond issuances, as sovereigns look to capitalize on what is “an opportunistic time” for debt markets as interest rates dip this month, Bloomberg reports. Yields on 10-year US Treasuries are down more than 10 basis points this month, with markets expecting the US Federal Reserve to start winding down its monetary tightening sooner rather than later after May figures showed US inflation beginning to cool. “Now is the calm before further external factors come into play,” Oren Barack, managing director of fixed income at New York-based Alliance Global Partners, tells the business information service.

Who’s tapping the market: Four countries — the UAE, the Dominican Republic, Indonesia, and South Korea — all tapped the market yesterday, making it “one of 2024’s busiest days.”

EM debt markets already came out the gate strong at the start of 2024, with the first four days of the year seeing USD 24.4 bn worth of issuances, making it the “busiest start to a year on record for USD- and EUR- denominated debt issuance out of developing nations,” the business information service said at the time. The momentum has been sustained in the months since, with some USD 300 bn of hard currency debt from EM sovereign and corporate issuers going to market year-to-date, rising c.30% y-o-y.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning, with the ASX 200, Hang Seng, and Shanghai Composite all in the red and the Kospi and Nikkei both in the green. US stock futures are largely unchanged in overnight trading after the S&P 500 and Nasdaq Composite each ended three-day losing streaks yesterday. Futures point to a mixed open in Europe later this morning.

ADX

9,002

-0.2% (YTD: -6.0%)

DFM

3,999

0.0% (YTD: -1.5%)

Nasdaq Dubai UAE20

3438

+0.3% (YTD: -10.5%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

4.8% o/n

5.4% 1 yr

TASI

11,731

+0.3% (YTD: -2.0%)

EGX30

27,264

+1.3% (YTD: +9.5%)

S&P 500

5,469

+0.4% (YTD: +14.7%)

FTSE 100

8,248

-0.4% (YTD: +6.7%)

Euro Stoxx 50

4,936

-0.3% (YTD: +9.2%)

Brent crude

USD 84.94

-1.2%

Natural gas (Nymex)

USD 2.76

-2.0%

Gold

USD 2,331.60

-0.6%

BTC

USD 61,875.30

+4.0% (YTD: +46.4%)

THE CLOSING BELL-

The DFM fell 0.04% yesterday on turnover of AED 305.6 mn. The index is down 6% YTD.

In the green: AL Salam Sudan (+12.8%), Watania International Holding (+6.2%) and Orascom Construction (+2.9%).

In the red: Sukoon Takaful (-3%), National Central Cooling Co. (-2.9%) and Al Salam Bank (-2.5%).

Over on the ADX, the index closed down 0.2% on turnover of AED 1 bn. Meanwhile Nasdaq Dubai closed up 0.3%.

CORPORATE ACTIONS-

Adnoc Drilling announced a new dividend policy to increase dividends by at least 10% annually over the next five years (2024-2028), aiming for a total yield of over 27%, a press release reads. Adnoc’s board may also approve extra dividends based on cash flow and growth opportunities. Dividends will be paid semi-annually, with final payments in the first half and interim payments in the second half of each fiscal year.

Tags: