Venezuela outperforms in volatile session
By Davide Scigliuzzo
NEW YORK, Feb 10 (IFR) - Venezuela outperformed in a weaker sovereign market Tuesday despite a volatile session that saw the South American country's bond prices whipsaw in response to new FX measures.
An aggressive bid for Venezuelan paper early morning quickly vanished after the government revealed only small changes to the current three-tier foreign exchange regime.
"The launch of this third FX market (SIMADI) has the potential to give the system some flexibility...," Barclays analysts wrote in a note to clients.
"But the initial proportion of the FX supply that the government seems willing to move to this market strikes us as too small to have a meaningful impact,"
Venezuelan bond prices swung in response to the initial disappointment that only small volumes would be allowed to trade at the weakest FX rate, but nonetheless ended the day up to two points higher as buyers returned late afternoon.
Elsewhere in the region, bonds of low-beta sovereigns like Mexico and Colombia closed 5bp-10bp wider in spreads, while Brazil widened by a larger 10bp-15bp.
Trading in corporate credits delivered a similar mixed picture, with investment-grade names that usually benefit from strong demand from crossover investors seen outperforming.
Bonds of Brazilian meat producer JBS, for example, were ending the day half a point higher, while Mexican cement company Cemex's 2024s were up a point at the close to a cash price of 99.75. Continuación...