Joyce Chang, head of emerging markets research at JP Morgan, said that while the volume of emerging markets issuance had increased in the year to date to Dollars 62bn from Dollars 58bn in the same period last year, 53 per cent of all new issues came from investment-grade issuers, which attract cross-over funds. The pace of issuance had slowed sharply in past months, she said.
"High-grade investors proved more resilient to emerging markets turmoil caused by Argentina and Turkey," she said.
Moody's said 70 entities had been downgraded compared with just 3 upgrades. However, 65 of the downgrades were in Argentina. "Unless upgrades pick up significantly in the next month and a half, the third quarter will be one of the worst on record for the emerging markets," the agency said.
Arnab Das, head of emerging markets strategy at Dresdner Kleinwort Wasserstein, said: "Countries with strong balance of payment and solid fiscal positions should be able to access the market."
Israel, rated A2/A-, is expected to tap the international capital markets in a Dollars 500m bond deal that could come later this year. Two Baltic countries, Latvia and Estonia are preparing bond transactions. Latvia is expected to raise Euros 150m through bonds with maturity of seven to 10 years, while Estonia said it would launch a Euros 100m five-year bond.
On the corporate side, Cesky Telecom, the part state-owned Czech telecommunications operator, is expected to raise up to Euros 1.5bn by the end of the year, the largest corporate bond in the region.
Copyright: The Financial Times Limited
