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.

Hunting for yield among local bonds

For emerging-market bond investors in the know, the former Soviet Union - especially central Asia - is the place to be. Debt markets have rallied across the board, yields are mostly buoyant, and currencies have held their own against the dollar. But title and settlement can sometimes be a little hairy. Theodore Kim investigates the excitement.

Flights to Kazakhstan, Uzbekistan, Moldova, and Kyrgyzstan used to be sparsely filled by mining engineers or backpacking tourists. Since the start of this year, the passengers have been just as likely to include hedge fund analysts in red braces checking out what they have identified as the next hot opportunity in emerging markets.

Their attention has shifted from eastern Europe, where fixed-income yields have been narrowing across almost all the region's debt markets. Even Russian GKOs, one of the world's best-kept secrets last year when their yields topped 200%, now pay under 20% in rouble terms. Dollar-hedged GKO structured products - which take care of currency, custody, clearing and foreign ownership restrictions all in one - are barely showing a double-digit yield. Bulgarian T-bills and zunk bonds, the best performers in the emerging-market universe in the second quarter of 1997, are now so over-priced that some speculators have begun to short-sell them. So the party is moving on to countries that would send most traders searching for a post-Soviet atlas.

A strong indication of the trend came in June, when Hong Kong-based Regent Pacific, which has a record of digging up hidden lucrative investments ahead of the pack, successfully launched a $70 million Central Asia Fund.

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.


Unlimited access to and

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


Unlimited access to and, 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


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