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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (65364)	6/23/2005 1:28:59 AM
From: shades	Respond to of 74559

Pasco County, north of st pete.

To: energyplay who wrote (65364)	6/23/2005 2:06:02 AM
From: elmatador	Read Replies (1) \| Respond to of 74559

Capital spreading more evenly: LATAM fill its budget gap already raised 95% of the amount required this year. “This means that Latin American countries will be less of a hostage to any external shocks that might close their access to the capital markets.” Emerging market debt flourishes By Päivi Munter Published: June 22 2005 18:53 \| Last updated: June 22 2005 18:53 Turkey was expected to place a €750m bond, highlighting the unprecedented success by emerging market countries in the international capital markets this year. The government’s seven-year issue was expected to put it on track to meet this year’s borrowing needs this summer, a milestone Brazil reached with its $600m 10-year issue on Monday. JP Morgan said Latin America – the region most heavily dependent on external borrowing to fill its budget gap – had already raised 95 per cent of the amount required this year. “This has never happened so early in the year,” the US investment bank said. “This means that Latin American countries will be less of a hostage to any external shocks that might close their access to the capital markets.” Meanwhile, the Europe, Middle East and Africa region has managed to raise 80 per cent of this year’s borrowing requirement before the second-half, while Asia, which has modest borrowing needs, has fulfilled 50 per cent of its requirement. The success of emerging market governments, many of which have tended to be heavily dependent on external borrowing, owes a lot to the low interest rates and the ample liquidity in the global financial system that have boosted demand for higher-yielding assets. Heavily-indebted Turkey was expected yesterday to pay an interest rate of just 4.95 to 5 per cent for the seven-year bond, a prospect that was unimaginable for the government a few years ago. But the favourable borrowing conditions also stem from the vastly improved public finances in emerging market countries. Fitch Ratings said last week that emerging market governments were, for the first time since the creation of the asset class, expected to become net creditors. This means their current external receipts exceed their outstanding external debt. This phenomenon, expected to occur by next year, has been fuelled largely by the high prices of oil and other commodities, the principal export of many emerging market countries. Oil prices have this week been at record highs at about $60 per barrel, while copper prices have also reached all-time peaks. This augurs well for emerging market bond prices. “Unlike in the 1990s, emerging market governments are now able to fund themselves well ahead of schedule,” JP Morgan said. “This means volatility in emerging market bonds is likely to remain low.”