Alongside the riches, Ghana’s oil boom has also ushered in a string of woes, including huge infrastructure needs and the stubborn problem of rampant public expenditure. So, at a time when investors are displaying appetite for sub-Saharan African bonds, it’s little surprise then that the country is planning to issue a Eurobond worth up to $1bn. Continue reading »
Chile has traditionally been, quite literally, a copper-bottomed investment.
Now Codelco, the state copper company, and Enap, the state energy company, are preparing international bond issues worth $2.5bn, according to financial newspaper Diario Financiero. Continue reading »
What does Rwanda, a poor African country that has suffered a horrific war and genocide, have in common with Costa Rica, a Central American country of 4.5m best known for its beaches and high-quality coffee beans?
Answer: Both are the latest to benefit from the wave of cheap money looking for returns, by issuing debt at ridiculously low rates. Continue reading »
Whatever happened to the “great rotation“? Wasn’t 2013 supposed to be the year when investors finally took their cash out of bonds and put it to work in equities?
Judging by the record week emerging market bonds have had, EM equities bulls might have some waiting to do yet. Continue reading »
2012, as beyondbrics readers know, was a record year for emerging markets bonds. But it turns out it was also a record year for defaults.
According to a new report out from Standard & Poor’s, defaults among EM corporate issuers accounted for about 30 per cent of global corporate defaults by issuer count – the highest in the 16 years since the rating agency started keeping scores. Continue reading »
Nigeria’s capital markets received a filip in October when the country was admitted to JP Morgan’s emerging market Government Bond Index, a move that that could potentially attract $1.5bn of new capital inflow into the country. Now there’s some more good news for sub-Saharan Africa’s second biggest economy, and this time it is the thinly-traded corporate debt market which stands to benefit.
The International Finance Corporation, the World Bank’s investment banking arm, is getting ready to launch a five-year naira-denominated bond, aimed to develop local capital markets. Continue reading »
2012 was a great year for EM external (or ‘hard currency’) sovereign debt, with double digit returns and record fund inflows. The question at the start of 2013 is “will it last?” Pimco, one of the world’s largest fixed income investors, suggests in a note released on Monday that the asset class has in general reached fair value, and may even be overpriced. Continue reading »
If there were any fears that the EM assets boom seen over the past year – particularly in fixed income – could peter out as valuations get stretched, they have been more or less put to rest by Ben Bernanke’s latest actions. The chairman of the US Federal Reserve on Wednesday announced another round of monetary easing, a move that will add to the flood of hot money that has been making its way to EM assets. Continue reading »
Another week, another wave of emerging market companies and governments gearing up to sell bonds.
With just a few weeks left before the end of the year, borrowers from El Salvador to Mexico to Mongolia are rushing to tap the market’s seemingly bottomless appetite for EM debt and lock in record-low borrowing rates. Continue reading »
Gramercy, the $3.2bn emerging markets hedge fund, has joined a growing chorus of critics who think the current emerging markets debt boom could soon turn to bust.
And it is putting its money where its mouth is – with the launch of a distressed debt fund that has already attracted $200m in commitments. Continue reading »
You have to feel for some investors. Barely have they found somewhere to put their money when the cry of “bubble” goes up.
But with the hot inflows into emerging markets bonds driving yields to a record low and valuation models getting thrown out of whack, that’s exactly what some EM specialists are suggesting. Continue reading »
Last autumn’s emerging market ‘currency quake’ has cast a long shadow over the local bonds of the developing world. But with the aftershocks fading, investors are beginning to return, write Robin Wigglesworth and Alice Ross. Continue reading »
Readers of beyondbrics know that emerging markets bonds are hot properties at the moment. Investors are flocking to them for their attractive yields and EM companies and governments, emboldened by the demand, have been happy to oblige, issuing a record $360bn in hard-currency bonds so far this year.
But every bond issued adds to the money that must be repaid somewhere down the line. For David Spegel, head of emerging markets strategy at ING, 2014 could be a crunch year for EM bond refinancing – particularly of speculative-grade bonds. Continue reading »
Call it the Jackson Hole effect. Or the Draghi bounce.
But after the August lull, the bond market in Latin America is roaring back to life again.
Emboldened by investors’ hunger for returns, LatAm companies and governments have wasted little time tapping international markets, raising some $5.7bn since the start of September, according to Dealogic. Continue reading »