The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

CEE sovereign debt: Riding the wave

Sovereign borrowers in central and eastern Europe have been key beneficiaries of the tide of liquidity washing into emerging market bond funds over the past 12 months. Can they maintain their success into 2013?

For emerging market debt bankers and borrowers, 2012 started well and just got better. In every sector and almost every country yields plummeted and issuance records were smashed as investors dived into dedicated funds in unprecedented numbers in an increasingly desperate hunt for returns.

By the end of October, data provider EPFR Global put cumulative inflows into foreign-currency emerging market mutual funds at more than $48 billion, and total flows into developing-world funds were widely tipped to hit a record $85 billion by the year-end.

The primary beneficiaries of this current of liquidity in the first half of the year were credits in Latin America and Asia as investors remained mildly wary of the potential impact of further turmoil in western Europe on neighbouring economies to the east.

However, such concerns were largely assuaged by European Central Bank president Mario Draghi’s announcement on September 6 that the bank would embark on outright monetary transactions to buy the bonds of troubled eurozone member states. The ECB move also put central and eastern Europe in pole position to benefit from the extra liquidity that flooded emerging markets a week later as the US embarked on a third round of quantitative easing.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree