Investment strategy Correspondent
Sujata's Feed
Oct 3, 2014

Teetering rouble overshadows lure of cheap Russian stocks

LONDON, Oct 3 (Reuters) – Russia’s beaten-down stocks may
have tempted U.S. fund giant Franklin Templeton but few other
investors are following, as the country’s economic meltdown
fuels a nosedive in its currency that could render any
investment worthless.

Templeton stepped forward in September, arguing a recent
sharp sell-off had gone too far and that the benefits of cheap
Russian equity could not be overlooked against world stock
markets at historically expensive levels.

Oct 2, 2014

Russia crisis, oil price fall dim appeal of first Kazakhstan Eurobond since 2000

LONDON, Oct 2 (Reuters) – Energy-rich Kazakhstan, gearing up
for its first Eurobond in over a decade, is seeing its appeal
dimmed by falling oil prices and the crisis in nearby Russia,
potentially forcing it to give investors a slightly higher yield
premium than expected.

Kazakh government officials are meeting investors in Britain
and the United States this week, aiming to enter the market for
the first time since a previous bond expired in 2007.

Oct 1, 2014

No sign of Naftogaz’s $1.6 bln bond payment yet-bondholder

LONDON, Oct 1 (Reuters) – A fund manager who holds a
Eurobond issued by Ukraine’s Naftogaz said on Wednesday he had
not yet received payment for the sovereign-guaranteed bond,
which matured on Sept. 30.

The $1.6 billion Eurobond is fully
guaranteed by the Ukrainian government, so if it is not paid
within a grace period, it will trigger so-called cross-default
clauses, bringing due all of Ukraine’s sovereign bonds at once.

Sep 30, 2014

Despite Fed, Russia, emerging bond issuance booms

LONDON, Sept 30 (Reuters) – Shrugging off fears over the
Fed, Russia and a default in Argentina, emerging market
borrowers are on track for record bond issuance volumes this
year, and their 2013 level may have already been surpassed.

A total of $459 billion was raised in the first nine months
of 2014, just above the $456 billion sold in the whole of last
year, according to data from BNP Paribas. Emerging governments
raised just over $100 billion of this, while the private sector
accounted for $354 billion, BNP Paribas said.

Sep 24, 2014

As Ukraine’s debt tangle unwinds, Russia holds key thread

LONDON (Reuters) – A selloff on Ukraine’s dollar debt is focusing attention on a controversial $3 billion bond held by Russia, raising investor concerns that President Vladimir Putin could use the issue to trigger a cascade of defaults across Kiev’s sovereign Eurobonds.

The so-called bail-bond, taken out late last year by former Ukrainian President Viktor Yanukovich, carries a clause which – given Kiev’s steadily worsening finances – may enable the Kremlin to demand immediate repayment.

Sep 24, 2014

Analysis – As Ukraine’s debt tangle unwinds, Russia holds key thread

LONDON (Reuters) – A selloff on Ukraine’s dollar debt is focussing attention on a controversial $3 billion (£1.8 billion) bond held by Russia, raising investor concerns that President Vladimir Putin could use the issue to trigger a cascade of defaults across Kiev’s sovereign Eurobonds.

The so-called bail-bond, taken out late last year by former Ukrainian President Viktor Yanukovich, carries a clause which – given Kiev’s steadily worsening finances – may enable the Kremlin to demand immediate repayment.

Sep 23, 2014

Ukraine Eurobonds plunge as markets sense restructuring pain

LONDON (Reuters) – Ukraine’s dollar bonds suffered a sharp selloff on Tuesday, plunging to multi-month lows as investors priced in the growing probability of debt restructuring and lower recovery rates for bondholders.

While Kiev’s ceasefire with pro-Russian militants in the country’s east is holding, its finances are looking increasingly untenable, with the economy set to shrink 8-9 percent in 2014 and the currency having lost about 40 percent so far this year.

Sep 18, 2014

Investors pricing Russia credit ratings downgrade

LONDON, Sept 18 (Reuters) – Investors are starting to price
the risk of Russia’s credit rating falling to junk if Western
sanctions and Moscow’s response plunge the economy into
recession and deplete its $450 billion reserves.

Being investment grade – at least BBB minus from Standard &
Poor’s and Fitch or Baa3 from Moody’s – allows a borrower to tap
a far wider pool of investors, and losing that ranking would be
likely to cause big outflows from Russian markets.

Sep 16, 2014

Rouble hits new low, at forefront of emerging market losses

LONDON (Reuters) – Expectations of a hawkish tone from the U.S. Fed this week pushed emerging stocks towards their ninth straight day of losses on Tuesday, while in Russia, the rouble tumbled to another record low against the dollar.

The U.S. Federal Reserve meets on Tuesday and Wednesday and is expected to flag the end of its bond-buying program and to provide clues about the timing of its first rate rise. While the dollar has steadied after strong gains last week, emerging assets are increasingly pricing in the prospect of reduced global liquidity.

Sep 14, 2014

Growing foreign fund influence a risk for emerging markets-BIS

LONDON, Sept 14 (Reuters) – The global fund management
industry is a potential source of risk for emerging markets
because of its vast size and herd-like investor behaviour that
can exacerbate asset price fluctuations, a BIS report said on
Sunday.

In its quarterly review, the Bank for International
Settlements said the selloff that rocked emerging economies last
year was a reminder of how “the activity of large asset managers
can significantly affect small and illiquid asset markets”.