Tensions over Iran may be helping to push up oil prices as traders worry about a widespread embargo on the country’s crude oil but markets in neighbouring Gulf energy-rich economies are not benefiting.
One year after the Arab Spring started in Tunisia, investors remain sensitive to political risk in the Middle East.
As political unrest once more seems to be a feature of the new year, with Nigeria and Romania among countries to experience protests, and the death toll continuing to rise in Syria, an increase in violence in Iraq is unnerving investors.
U.S. troops left Iraq at the end of last month, and on Dec 22 there were more than 10 coordinated bombings, followed by several further attacks this year.
LONDON, Jan 12 (Reuters) – Holders of Kazakh bank
BTA’s Eurobonds said on Thursday they are considering
forcing early repayment on BTA’s senior debt if the bank goes
into default next week, potentially allowing other creditors to
demand repayment of up to $8 billion.
They were speaking to Reuters a day after Anvar Saidenov,
chairman of BTA which is 81.5 percent owned by the country’s
sovereign wealth fund Samruk-Kazyna, effectively quashed any
hope that $160 million in coupons, originally due Jan. 3, would
be paid within a 10-day grace period.
LONDON, Jan 9 (Reuters) – Emerging stocks rose
slightly on Monday ahead of a meeting between French and German
leaders on euro zone growth, while the Turkish lira strengthened
on expectations of more central bank support.
Emerging markets, which underperformed developed markets
last year, are sensitive to swings in risk appetite due to the
euro zone debt crisis. Deleveraging by western European banks is
also seen hitting emerging Europe.
This time last year it was Ivory Coast, and today it was Kazakh sovereign wealth fund-controlled BTA bank which failed to pay $160 million in coupons on its debt.
In late 2009, Ukrainian state energy firm Naftogaz restructured its debt, the same year government-owned Dubai World declared a standstill on coupon payments.
LONDON, Jan 4 (Reuters) – Hungary’s forint hit a
record low on Wednesday as investors fretted about the country’s
access to international funding, while Kazakhstan’s BTA Bank
failed to make $160 million in coupon payments, raising a
The forint fell 1 percent against the euro, Hungarian
domestic and foreign debt yields soared and the country’s debt
insurance costs hit record highs for a second day on fallout
from recent political developments.
ALMATY/LONDON, Jan 4 (Reuters) – BTA,
Kazakhstan’s third-largest bank by assets, missed a Jan. 3
deadline to make around $160 million in coupon payments and
risks default if it fails to pay within a grace period of 10
working days, three sources said on Wednesday.
BTA, majority owned by Kazakhstan’s sovereign wealth fund,
had warned investors that it might be unable to make payments on
time as it prepares to persuade creditors to accept a second
debt restructuring at a shareholders’ meeting set for Jan. 26.
Indonesia is the only major emerging stock market to have posted any real gains in 2011, a year in which the broad MSCI emerging stock market index lost 20 percent and underperformed developed markets in a flight from risk.
But for Indonesia, which many say should turn the BRIC club into BRIIC, last year was one of surging growth, with the world’s largest coal exporter helped by rising commodity prices.
Distressed debt broker Exotix, which specialises in the kind of bonds most of us are too risk-averse to touch, recommends buying North Korean defaulted debt following the death of Kim Jong-il.
Stuart Culverhouse, chief economist at Exotix, says the debt, which matures in 2020 but could be rolled over if holders agree, could reach 20-22 cents on the dollar near-term, from 14-18 now.
Index compiler MSCI will announce tonight at 2300 GMT whether or not Qatar and United Arab Emirates get an upgrade to the firm’s flagship global emerging market stock index from their current slots in the frontier market index.
If any Qatari or UAE stocks get into the index, they are likely to make up only a small percentage of the benchmark, which has heavy weightings for countries like the BRIC nations and South Korea. But the move would attract investment from the many funds who measure their performance against the index, and might prefer not to deviate too far from it.