2000-04-24 Late recovery
Daily Brady Bond Trading Commentary
Monday April 24, 2000
A late recovery from another NASDAQ route did little to overcome the general tone of apathy in emerging debt markets Monday afternoon.
The abundant optimism that rallied the market in early March, largely based upon Mexico's elevation to investment grade, seems to have all but disappeared for the moment.
The high grade investor base has not been as eager to own Mexican debt as dealers had predicted, and the pessimism stemming from a stock market correction has spoiled many appetites for risk. Local economic fundamentals, if anything, remain on the mend in Latin America and Eastern Europe. But political risk will remain a factor as the summer approaches, with Presidential elections in Venezuela in a little more than a month, in Peru on June 25, and in Mexico the first week of July.
While the incumbent parties hold the advantage in all three cases, the final results are very much in question. It is also not known how well the electorates will perceive the results in terms of fairness and transparency.
Contributed by
Credit Lyonnais Securities (USA) Inc.
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