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from Global Investing:
And the winner is — frontier market bonds
Global Investing has commented before on how strongly the world's riskiest bonds -- from the so-called frontier markets such as Mongolia, Nigeria and Guatemala -- have performed. NEXGEM, the frontier component of the bond index family run by JP Morgan, is on track to outperform all other fixed income classes this year with returns of over 20 percent., the bank tells clients in a note today. Just to compare, broader emerging dollar bonds on the EMBI Global index have returned some 16 percent year-to-date while local currency emerging debt is up 13 percent.
That appetite for the sector is strong was proven by a September Eurobond from Zambia that was 15 times subscribed. Demand shows no sign of flagging despite a default in frontier peer Belize and shenanigans over the payment of Ivory Coast's missed coupons from last year. Reasons are easy to find. First, the yield. The average yield on the NEXGEM is roughly 6.5 percent compared with just under 5 percent on the EMBIG.
Second, this is where a lot of issuance is happening as big emerging markets such as Brazil and Mexico, once prolific dollar bond issuers, sell less and less on external markets in favour of domestic debt. Frontier markets are filling the gap. JPM says Angola, Guatemala, Mongolia and Zambia joined the NEXGEM in 2012 as they made their debut on global capital markets. Bolivia is also set for inclusion soon, taking the number of NEXGEM members to 23 by end-2012.
NEXGEM's market value also jumped in this period by 36 percent to $33.3 billion. It now represents 5.9 percent of the EMBI Global, up from 5.3 percent a year back, JP says.
from Global Investing:
Easy business trend in emerging Europe
Polish central bank governor Marek Belka doesn't apportion a lot of importance to the fact that Poland can boast the second biggest improvement in the latest World Bank's ease of doing business index, after Kosovo.
"This year we have improved, but I don’t care too much about it," Belka said at a meeting in London today.
from Breakingviews:
Public investors lose in Mongol mining battle
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Mongolia’s treatment of the Chinese bid for coal-producer SouthGobi shows that the state which birthed Genghis Khan has lost none of its warlike spirit. Politicians seem determined to spike an offer from China’s state-owned Aluminium Corp of China (Chalco), which also involves mega-miner Rio Tinto and China’s sovereign wealth fund. A truce is possible, but public investors look likely to lose out.
from Photographers Blog:
Set free in the Mongolian wild
By Petr Josek
Bulgan airport in the southwest part of Mongolia reminds me of a small train station from the spaghetti western film "Once Upon a Time in the West." It's slow, hot and once a week people wait for an airplane with no more then 20 passengers on board to arrive.
The day of July 17, 2012, was different.
The Czech Army plane Casa brought on board four Przewalski mares. They are endangered animals with a sandy brown coat and faintly striped legs, extinct in their homeland since the early 1970s.
from Breakingviews:
Mongolia’s task: avoid Nigerian resource curse
By Martin Hutchinson
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
In much of the developing world, natural resources seem to offer a handy way out of poverty. But they also present a curse. Mongolia, where the center-right Democratic Party led last week’s elections on a wave of resource nationalism, would be wise to avoid the mistakes of Nigeria and other nations. Government and private fingers can get sticky, the bonanza wasted and non-resource activity burdened and disincentivized.
from Photographers Blog:
Jugderdem’s backyard
By Carlos Barria
Two-year-old Jugderdem Myagmarsuren opens the door of his tent to play with his plastic scooter in the backyard. He is accompanied by sheep and cows. This is not an ordinary backyard. It’s the Mongolian steppe, and his closest friends might live more than two kms (1.2 miles) away.
While the world’s population reached 7 billion on October 31st, 2011, Mongolia remains the least densely populated country on the planet, with 2.7 million people spread across an area three times the size of France. Two-fifths of Mongolians live in rural areas spread over wind swept steppes.
from Andrew Marshall:
Risks to watch in Asia: Country guides
For Reuters analysis of risks to watch in Asian countries, kept updated in real time and with graphics and video, click on the links below.
from Russell Boyce:
Asia – A week in pictures
Rarely do so many big stories of global interest happen at the same time from one region but last week in Asia its been incredible.
Soldiers and aid workers struggled to reach at least a million people cut off by landslides that have complicated relief efforts after the worst floods in Pakistan in 80 years. Poor weather has grounded relief helicopters and more rain was expected to compound the misery of more than 13 million people . The floods have killed more than 1,600 people.
from DealZone:
DealZone Daily
U.S. industrial gas supplier Air Products and Chemicals Inc launches a hostile bid to buy rival Airgas Inc for about $60 per
share in cash, in a deal valued at about $7 billion including assumed debt.
Deutsche Telekom is considering an initial public offering or spinoff of its U.S. wireless service T-Mobile USA, the Wall Street Journal reports, citing people familiar with the matter. T-Mobile USA could have an equity value of around $20 billion, the Journal says.
