Model goes astray

Investors have piled into Czech koruna Eurobonds since they were first issued last year. Issuers too have continued to be attracted by favourable swap opportunities. Can the interest be sustained or is the vaunted model market for central and eastern Europe flashy but short of take-off power? Catherine Garner reports.

The Czech koruna bond market has been heralded as the model for the emerging capital markets of central and eastern Europe. The Czech Republic has what appears to be a stable economy, the currency is riding high, and the international financial community has tipped it as the first country in the region to join the European Union. Debt issuance is accelerating to keep up with investors partly spurred by high nominal interest rates.

Last September, the market’s prodigy, the Eurokoruna, was born.

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