LatAm bond rally loses steam as investors take profits

miércoles 15 de abril de 2015 17:31 GYT

By Davide Scigliuzzo

NEW YORK, April 15 (IFR) - A recent rally in Latin American credits was showing signs of fatigue on Wednesday, as investors took profits in Brazil and remained sidelined in Venezuela despite a run-up in oil prices.

Brazilian state-run oil company Petrobras's 2024s and 2044s were closing some 20bp wider in spread terms to end the day at 455bp-450bp and 470bp-465bp respectively.

The two notes had tightened all the way to 425bp and 440bp respectively on Tuesday, after the company said the board would meet on April 22 to approve its 2014 audited financial statement.

The curve of miner Vale also widened slightly on profit taking, with the 2023s ending the session at 310bp-305bp, or 5bp weaker on the day.

Elsewhere, investors took a hands-off approach to a Venezuela debt market that is starting look expensive, leaving the oil rich country's bonds lagging a 6% rally in WTI crude prices on Wednesday.

"The surge in oil didn't do much for PDVSA and Venezuela," said a sovereign bond trader in New York. "Why would you want PDVSA 2015s at 97.5-98.5 when you have two points of upside and 90 points of downside?"

Activity in Argentine bonds was also subdued, as market enthusiasm for the sovereign wanes after a considerable run-up in prices this year.

"(Activity in) Argentina has been the slowest in years," said the trader. "I guess it is also looking expensive and there have been no news flashes on the holdouts (recently)."   Continuación...