The trade group, EMTA, revealed an industry survey showing that local bond markets has sent emerging market debt trading to a record $6,500bn in 2006, a rise of 19%. Local market trading made up 57% of overall activity compared to 47% in 2005 and 45% in 2004, with Mexican local securities the most popular, followed by Brazil, South Africa, Poland and Turkey.
Lebanon’s central bank governor said donors will give the country $2 billion unconditionally and soft loans of 4% interest to finance foreign currency denominated bonds, which will mature in 2007. However, with no consensus on political and economic policies, Lebanon remains a significant investment risk.
According to the Economic Times, India is likely to invest around $10 billion of its $185 billion foreign exchange reserves in a search for a higher yield. This would follow China’s example, breaking away from a policy of security to that productive investments in the context of abundant global liquidity. Analysts expect the returns may be used to help finance domestic companies.
Slovakia is to sell EUR 1bn Eurobonds every year between 2007-2010, with 3 to 5 yr maturities. Analysts expect a buy back of government debt and issuance of new debt on the domestic front, to stagger repayments gradually before entry into the Eurozone.
Thailand’s central bank predicts economic growth of 4% to 5% predicting faltering investment and falling domestic consumption in the first half of the year as a result of political uncertainty. Reuters reports that the country’s public debt amounted to 40.85% at the end of December 2006, compared to 40.78% at the end of the previous month.
- Information provided by Euromoney group sources.