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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: wl9839 who wrote (15319)	5/17/1999 8:32:00 AM
From: wl9839	Read Replies (1) \| Respond to of 22640

Emerging Market Debt Trading Volume Rising Sharply Since March New York, May 17 (Bloomberg) -- Trading in emerging markets bonds has revived as a recovery in Brazil stemmed a rout in high- risk debt that throttled trading the past nine months. Bond investors in search of higher yields than in the U.S. and Europe drove daily trading in emerging markets debt by up to 35 percent in recent weeks. Brazil's rapid turnaround from January's currency devaluation stoked optimism that the two-year slide in emerging markets has ended. The resurgence followed a first quarter when emerging-market debt trading totaled about $529 billion, the Emerging Markets Traders Association said in a survey today. That's in line with the $522 billion in the fourth quarter of 1998. It's about half the $1.39 trillion in the second quarter and a fraction of the record $1.62 trillion in the first quarter of 1997. ''Global risks have diminished substantially,'' said Raul Elizalde, head of fixed-income research at Santander Investment Securities. ''People aren't talking anymore about a global recession or the IMF running out of money.'' Salomon Smith Barney said its daily volume is about 35 percent higher in April and May from the first three months of this year. ABN Amro Inc. said its emerging market debt trading is up 25 percent from the first quarter. Still, ''a lot of hedge funds left during the crisis and haven't really come back,'' said Pablo Goldberg, vice president for emerging markets fixed income at ABN Amro in New York. Yields The increase in volume has driven up bond prices, causing yields to slide. Prompting borrowers to return to the markets. Last week, the governments of Qatar, Turkey, Argentina and South Africa all sold bonds. Brazil last month sold $3 billion of bonds. The J.P. Morgan emerging market bond index closed today at 152.41, up 10 percent this year and up 39 percent since hitting a two-year low of 109.5 last September 10, less than a month after Russia sparked the crisis by defaulting on some of its debt. Among countries, one of the sharpest volume increases has been in the trading of Venezuelan bonds. Paul Masco, head of emerging market debt trading at Salomon Smith Barney, said his firm's trading in Venezuelan bonds is up 80 percent in April and May compared with the first quarter as oil prices soared. The yield on Venezuela's bond maturing in 2027 has slid from its high of 17.1 percent on March 8 to 13.1 percent. The yield on Brazil's ''C'' bond, the most widely traded emerging market debt security, narrowed to about 14 percent from almost 20 percent in the wake of the devaluation in January. ------------------------------------------------------------------------ © Copyright 1999, Bloomberg L.P. All Rights Reserved.