CAPITAL MARKETS IN central and eastern Europe remained moribund for many months after buoyant issuance had returned in western Europe and north America. However, since the second half of 2009, primary markets for bonds and equity have gradually reopened in such countries as Russia and Poland.
As good news in central and eastern Europe’s financial press becomes more frequent, government finance worries have grown in western Europe. The plight of Greece, for example, has made states such as Hungary, which required an IMF bailout in 2008, look relatively healthy and conservatively managed. Investors have returned to central and eastern Europe, in some cases because they perceive that they can get a better reward for risk than in more highly rated but indebted states in western Europe.
Russia’s stock market index roughly doubled in value in 2009 and the CECE index of Polish, Czech and Hungarian stocks has recovered...
