economy business news4

Bonds analysis Emerging Markets has record of good start this year- Emerging markets have had their best start as issuance surged and yield narrowed to their tightest level over us treasurries Riskier assets such as emerging debt were helped by more stability in the European government fixed income market after Greece successfully issued bonds. Bryan Pascoe opined that risk appetite from emerging markets side stronger given the prevailing performance. Nigel Rendell, senior emerging markets strategist at RBC Capital Markets, said: “It is a good time for investors to take some profits and wait for a better time to buy as the market is almost certain to fall in the next few months.” Emerging market sovereign bonds deals have reached a record $127bn so far this year, a 36 per cent increase on last year – the previous record – according to Dealogic. The data provider has been tracking the sector since 1995. Developing world government bond yields for international deals, which are mostly priced in dollars, have been tightening since March last year, when sentiment started to improve on hopes of a global recovery. They have narrowed even more sharply in the past month. Emerging market bond yields narrowed to 254 basis points over US Treasuries on Friday, compared with 350bp only a month ago and a peak of 684bp in March last year, according to JPMorgan indices. Brazil, which has a strong economic story and is one of the more liquid emerging markets, has been one of the best performers. Average Brazilian bond yields in dollars are only 186bp over US Treasuries compared with 442bp this time last year, says JPMorgan. The local currency bond markets have also sharply outperformed developed world debt. For example, Indonesian five-year bonds are trading 596bp over US Treasuries compared with peaks of 1,074bp in March last year