Carolyn's Feed
Nov 28, 2012

Safe or junk, bonds in bubble trouble

LONDON (Reuters) – Investors’ love affair with bonds could be on the rocks after five long years as both safe haven and junk bonds look to be in bubble territory.

Huge demand has pushed borrowing costs for sovereigns as well as companies to multi-year or even record lows, with some governments in the West now effectively charging investors to lend to them.

Nov 21, 2012
via Global Investing

Strike on Iran: bets are off

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Spread betters have drastically cut their expectations of a U.S. or Israeli air strike on Iran since Barack Obama’s re-election earlier this month.

Intrade, a Dublin-based online exchange, is showing 20 percent of its clients seeing a strike by June 2013, and 33 percent by Dec 2013.

Nov 20, 2012
via Global Investing

Angola: is it a loan, is it a bond?

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Is it a bird or is it a plane?

Among the scores of issues coming to the flavour-of-the-year emerging sovereign debt market – recent borrowers include Costa Rica and Ukraine – Angola’s debut deal is one of the most confusing.

Russia’s second-largest bank VTB provided what was described as a $1 billion loan to the Angolan government earlier this year through a private placement of 7-year paper, with a yield of 7 percent.

Nov 15, 2012

Analysis: Expensive emerging markets assets may be vulnerable

LONDON (Reuters) – The looming U.S. fiscal cliff of tax rises and spending cuts combined with renewed euro zone tension over Greece are threatening demand for riskier emerging market assets, just when some are getting expensive.

It is all making the asset class vulnerable to a pullback.

Once high-yielding bonds are offering less than they were and although emerging equities have performed less well than fixed income, some sectors within them are looking pricey.

Nov 15, 2012

Expensive emerging markets assets may be vulnerable

LONDON, Nov 15 (Reuters) – The looming U.S. fiscal cliff of
tax rises and spending cuts combined with renewed euro zone
tension over Greece are threatening demand for riskier emerging
market assets, just when some are getting expensive.

It is all making the asset class vulnerable to a pullback.

Once high-yielding bonds are offering less than they were
and although emerging equities have performed less well than
fixed income, some sectors within them are looking pricey.

Oct 30, 2012
via Global Investing

Emerging Policy-surprises all round

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A cut was expected, but not there. Israel sliced rates to 2 percent on Monday, surprising even the central bank’s own economists, who forecast steady rates till the end of next year. India’s central bank, meanwhile, kept rates steady earlier today, even though the country’s government had been pushing for a trim.

Emerging economies continue to grapple over whether it’s better to tackle growth or to fight inflation. For the Reserve Bank of India, which left rates at 8 percent but chopped banks’ cash reserve ratios, an inflation rate of nearly 8 percent in September was enough to cause alarm.

Oct 25, 2012

Spanish bonds regaining favour among some investing elite

LONDON, Oct 25 (Reuters) – The ECB’s bond-buying plan,
Madrid’s reforms and global monetary easing are luring foreign
investors back to Spanish sovereign debt, particularly for
short-term paper.

It is a case of searching for yield while knowing that the
European Central Bank has your back.

Oct 25, 2012
via Global Investing

Emerging Policy-Philippines cuts, Mexico to hold steady?

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Emerging market economies continue their trend to spur on growth rather than fight possible QE-induced inflation, with the Philippines cutting rates earlier today.

The Philippines’ central bank cut overnight rates by 25 bps to a new low of 3.5 percent for the borrowing window and 5.50 percent for the lending facility, a move helped by annual inflation at the lower end of the country’s 3 to 5 percent target band.

Oct 24, 2012
via Global Investing

Forgive and forget in emerging debt?

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If you’re an emerging market borrower, it seems like it’s a great time for sorting out those old troublesome debts as pumped-up yield appetite in the fixed income universe encourages another bout of selective amnesia among creditors and bond investors.

Serial defaulter Ivory Coast met investors in London this week, next stop New York later today, to discuss a new schedule for missed coupons on its $2.3 billion bond due 2032.

Oct 18, 2012

Deleveraging: not as bad as all that?

LONDON, Oct 18 (Reuters) – Worries about a chaotic
withdrawal of assets by cash-strapped western European banks
from central and eastern Europe appear so far to have been
overdone.

The previously feared draining of cash has been less than
expected.

Around 75 percent of banking assets in central and eastern
Europe are owned by western European banks – with Bulgaria,
Hungary and Romania particularly exposed.

    • About Carolyn

      "I work in London as part of the Reuters investment strategy editorial team, specialising in emerging and frontier markets. I cover emerging bond, stock and FX markets as well as global market themes, and interview emerging market policy-makers when they attend events in London. I started at Reuters in 1993, writing about foreign exchange, government bonds and Eurobonds before switching to emerging markets."
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