Hungary: investors forgive Orban, for now
Who would have thought it? Viktor Orban, Hungary’s outspoken prime minister, is getting sympathy from an unusual quarter: the markets.
Far from siding with the International Monetary Fund and the European Union over Budapest’s spat with the multi-lateral institutions, many investors say Orban has a point in his desire to slacken fiscal targets for his country. Continue reading »
Greece: sinking feelings in a submerging market
So Greece is officially sliding back into the ranks of emerging markets in the eyes of many investors.
Following nine years and two months at the top table after joining the euro, the Greeks have returned to emerging market status after Moody’s today became the second rating agency to downgrade them to junk status following Standard & Poor’s.
JP Morgan told the FT today that Greece was now eligible for the Embi+, the global emerging market sovereign debt benchmark index the the bank runs. To add insult to injury, Athens cannot actually join the Embi+ because it fails to meet the entry criteria. Continue reading »
International investors shun Hungary’s bond auction
Loose talk costs money in the world’s market place. Hungary has found that to its cost. On Thursday, the country saw the first bond auction failure since it was bailed out by the International Monetary Fund in November 2008.
This is nothing to do with parlous finances.The main cause of pressure in the bond markets is the ongoing debt problem of Hungary’s eurozone neighbours. The country is awash with cash and has been showing strong commitment to structural and financial reforms. It has a €20bn loan from the IMF and the European Union, of which it has drawn €14bn. Much of this money is still locked away in the central bank’s reserves. Continue reading »
Emerging markets get boost from Greek crisis
Emerging markets are doing very nicely out of the Greek crisis. If you don’t fancy Greek two-year bonds at 12.79 per cent, why not buy some other debt – say Turkish at 9.49 per cent?
The rush to emerging market bonds became clear again yesterday when EPFR Global published the latest inflows into the asset class. They now stand at $15.3bn so far this year. Compare that with the previous record of $9.7bn in 2005 – and that was for the whole of that year. Continue reading »
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Stefan Wagstyl
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Pan Kwan Yuk
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