From Angola to Belarus, emerging-market governments are planning first-time debt offerings to take advantage of the biggest bond rally in at least 11 years. Investec Asset Management, Aberdeen Asset Management and Threadneedle Asset Management say they may buy some of the $4 billion of debt Angola plans to sell, as well as proposed dollar bonds from Belarus.
Vietnam aims to raise $1 billion in its first offering of foreign-currency securities in four years, deputy prime minister Nguyen Sinh Hung said on Wednesday. Iran, under three sets of United Nations Security Council sanctions, targets a e1 billion sale by December. Developing-nation government bonds are trading near the lowest yields on record, at an average of 6.49%, after the biggest 12-month decline. Sales rose 70% to a record $554 billion this year as central banks across the world cut interest rates .
Debuts are planned by governments without credit ratings or dependent on international bailouts. “It’s because of the wall of money that comes from extremely accommodative monetary policy globally,” said Edwin Gutierrez, emerging-market money manager, Aberdeen.
Developing-nation dollar bonds have returned 26% so far this year, according to JPMorgan’s benchmark EMBI+ Index, compared with a 23% gain in the S&P’s 500 index. Emerging-market debt is trading at average yields 0.15 percentage point above a low in 2007 of 6.34%. Demand for higher yields was one reason investors placed $28 billion of orders for Qatar’s $7 billion bond sale this week, the largest emerging-market deal to date. They received 1.85 percentage points more in interest on the five-year securities than US. Treasuries, compared with 3.4 percentage points when the government went to market in April.
“People are allocating into emerging-markets because they are the standout performers,”said Peter Eerdmans, the head of emerging-market debt at Investec. Angola is seeking to sell its first international bonds to help pay for construction projects after a decline in oil proceeds. The country will need to offer higher yields than other sub-Saharan nations including Ghana, whose bonds due 2017 that were sold in 2007 yield 8.5%, said Aberdeen’s Gutierrez. Belarus, a country of 10 million people with an economy the size of Sudan’s, has received $3.5 billion of International Monetary Fund bailout loans this year.
Vietnam aims to raise $1 billion in its first offering of foreign-currency securities in four years, deputy prime minister Nguyen Sinh Hung said on Wednesday. Iran, under three sets of United Nations Security Council sanctions, targets a e1 billion sale by December. Developing-nation government bonds are trading near the lowest yields on record, at an average of 6.49%, after the biggest 12-month decline. Sales rose 70% to a record $554 billion this year as central banks across the world cut interest rates .
Debuts are planned by governments without credit ratings or dependent on international bailouts. “It’s because of the wall of money that comes from extremely accommodative monetary policy globally,” said Edwin Gutierrez, emerging-market money manager, Aberdeen.Developing-nation dollar bonds have returned 26% so far this year, according to JPMorgan’s benchmark EMBI+ Index, compared with a 23% gain in the S&P’s 500 index. Emerging-market debt is trading at average yields 0.15 percentage point above a low in 2007 of 6.34%. Demand for higher yields was one reason investors placed $28 billion of orders for Qatar’s $7 billion bond sale this week, the largest emerging-market deal to date. They received 1.85 percentage points more in interest on the five-year securities than US. Treasuries, compared with 3.4 percentage points when the government went to market in April.
“People are allocating into emerging-markets because they are the standout performers,”said Peter Eerdmans, the head of emerging-market debt at Investec. Angola is seeking to sell its first international bonds to help pay for construction projects after a decline in oil proceeds. The country will need to offer higher yields than other sub-Saharan nations including Ghana, whose bonds due 2017 that were sold in 2007 yield 8.5%, said Aberdeen’s Gutierrez. Belarus, a country of 10 million people with an economy the size of Sudan’s, has received $3.5 billion of International Monetary Fund bailout loans this year.
0 comments:
Post a Comment