德银-新兴市场-金融行业-十月价格行为监测-20171101-Deutsche_Bank-Financials_HY_Multi_Sector_IG_Multi_Sector：CEEMEA_RV_monitor~October_price_action_23页_1mb

Emerging Markets Corporate Credit Financials Summary - November 1, 2017

Core Content Overview

This report provides an analysis of corporate credit performance in the Central and Eastern Europe, Middle East, and Africa (CEEMEA) region during October 2017. It highlights the overall performance of corporate credits, key sectoral movements, and specific country and issuer-level insights. The report also includes an analysis of the 3Q17 results for major Turkish banks and a summary of financial metrics for selected companies in the region.

Main Points

• Overall Performance: CEEMEA corporate credit spreads tightened by 5bps in October, underperforming the broader EM corporate index which tightened by -13bps. The performance was influenced by stable U.S. Treasury (UST) yields, quiet corporate news flow, and a rise in crude oil prices.
• Country Performance: Most CEEMEA countries saw spread tightening, except Turkey and South Africa. Russian credits outperformed with a tightening of 17bps, followed by GCC credits (4-7bps). Turkish credits underperformed the most with a spread widening of 18bps due to the weakening Turkish Lira (TRY) and negative headlines about U.S. Treasury fines on Turkish banks. South African corporates also weakened with a spread widening of 10bps since mid-October.
• Sector Performance:
  • Utilities: Spread tightened by 3bps. Outperformers included SRELE, while underperformers included DEWAIE.
  • TMT: Spread tightened by 1bps. Outperformers were MTNSI, while underperformers were QTELOD.
  • Real Estate & Construction: Spread tightened by 4bps. OPRORU was the top outperformer with a tightening of 167bps, while DAMACR was the weakest with a widening of 36bps.
  • Oil & Gas (Short Duration): Spread tightened by -4bps. KZOKZ was an outperformer, while SASOL was an underperformer.
  • Oil & Gas (Long Duration): Spread tightened by -6bps. KTZK was an outperformer, while EMRAT was an underperformer.
  • Metals & Mining: Spread tightened by -2bps. TRUBRU was an outperformer, while POLLN was an underperformer.
  • Food & Consumer: Spread tightened by 1bps. KAZNMH was an outperformer, while NEFES was an underperformer.
  • Banks (Seniors): Spread tightened by 1bps. EVMUK was an outperformer, while HALKBK was an underperformer.
  • Banks (Subordinates): Spread tightened by -244bps. NMOSRM had the most tightening, while VAKBN had the most widening.
  • Banks (Subordinates, Excl NMOSRM): Spread tightened by -15bps. CRBKMO was the top outperformer, while WAKBN was the weakest.

Key Observations

• Turkey's Impact: The underperformance of Turkish credits was significantly attributed to the decline in the Turkish Lira and negative news about potential U.S. fines on Turkish banks.
• Russian Performance: Russian corporates were the strongest performers in the region, with O1 Properties (OPRORU) leading the spread tightening in the real estate sector.
• Banking Sector: The performance of banks varied. Senior banks had a modest tightening, while subordinate banks saw significant tightening, with NMOSRM as the top performer and VAKBN as the underperformer.
• Corporate Financials: The report includes detailed financial metrics for various companies, such as net income, EBITDA, leverage ratios, and coverage ratios, which are essential for assessing credit risk and performance.

Conclusion

The CEEMEA corporate credit market experienced a mixed performance in October 2017, with spread tightening in most countries except Turkey and South Africa. The report highlights the importance of monitoring specific sectors and issuers, especially in the context of macroeconomic factors and corporate news. The analysis of the 3Q17 results for Turkish banks and the detailed financial data for various companies provide a comprehensive view of the region's credit dynamics.