Chasing yield: how the emerging market debt trading community is playing a dangerous game International Economy, The - FindArticles

  • . As reflected by the impressive 300-basis-point tightening in emerging market debt spreads since October 2002, it would seem evident that the market is yet to internalize the advice given to our bond trader.
  • . In particular, the market seems to have forgotten that the last time emerging market debt traded at today's lofty levels was in March 1998, on the very eve of the infamous August 1998 Russian debt crisis.
  • . And, just as was the case in early 1998, today's emerging market debt rally is also being fueled by the ample global liquidity flowing from the world's major central banks.
  • . Considering that the emerging market spread tightening has occurred despite Argentina having defaulted on around US$90 billion of its private sector debt as recently as in December 2001 (the largest sovereign debt default in history), one must wonder whether there is not something fundamentally flawed in the market for emerging market debt.
  • . In particular, one has to question the incentive system for trading emerging market debt that makes money managers pay all too little attention to the longer-run individual country economic fundamentals and all too much attention to figuring out where money might be flowing in these markets on a day-by-day basis.

    Emerging markets bonds: An asset allocation in search of a rationale Global Finance - FindArticles
  • IN > > > > Article Content provided in partnership with FIND IN Find Magazines by Topic Emerging markets bonds: An asset allocation in search of a rationale , by AN ASSET ALLOCATION IN SEARCH OF A RATIONALE The case for investing in emerging markets debt is compelling.
  • . One is to give some leeway to a US corporate high-yield manager, allowing the manager to invest a minor percentage, perhaps 10%, of the assets they've placed with him in emerging markets debt.
  • . The other is to place funds with dedicated emerging markets debt managers.
  • . "We want to control how much is invested in emerging markets debt." General Motors, with nearly $79 billion in assets, has allocated funds to several dedicated emerging markets debt managers for more than three years now.

    About Business Monitor International (BMI)
  • . Macroeconomic risk: Economic performance and outlook for GDP growth, industrial activity, inflation, forex and interest rates, trade, investment, debt Business environment risk: Government policy on inward investment and trade, industry, privatisation and economic reform, FTZs, tax, infrastructure, project finance, labour market, IP, environment.
  • . FINANCE & MARKET REPORT Analysis of latest debt, aid and investment developments; country reports on local stock markets and the investment climate covering price movements, new issues, foreign funds, privatisation and new regulations.
  • . Background to economy and policy-making environment: market size, economic structure, macroeconomic trends from 1970s to the present day covering growth performance, inflation, external accounts, foreign indebtedness and assets.
  • . EXTERNAL SECTOR OUTLOOK External sector forecast: BMI's 3-year forecast for the external sector, broken down by imports, exports, services, current account, reserves, external debt and finances.

    Investment banking in global financial markets - Dresdner Kleinwort Wasserstein
  • Press Archive - 2004 7 Jan 2004 DrKW Appoints Head of Emerging Markets Debt Syndicate London - 7th January 2004 - Dresdner Kleinwort Wasserstein (DrKW), the investment bank of Dresdner Bank AG, is pleased to announce the appointment of Carlyle Peake as director and head of Emerging Markets Debt Syndicate.
  • . Carlyle previously worked at Merrill Lynch as head of the Emerging Market Debt Syndicate desk in New York.
  • . From 1993 to 2002, Carlyle was responsible for the origination, structuring, marketing, pricing and execution of debt new issues for clients in Asia-Pacific, Eastern Europe, Africa and Latin America.
  • . Sean Park, global head of Debt Syndicate and Credit Trading, said: "DrKW has made significant progress in building a world class emerging markets new issue business in 2003.


    Photo by www.safehaven.com

    Investment banking in global financial markets - Dresdner Kleinwort Wasserstein
  • . Tilo, who joins as a vice president, will be based in Frankfurt, selling emerging market debt products to German accounts.
  • . Commenting on the appointment, Tarek Mahmoud, global head of sales and marketing, Capital Markets, said: "We are committed to growing our customer business for emerging market debt products and the German market is strategic in achieving this goal.

    RGE - Executive Bios
  • . Managed more than $28 billion in emerging market debt as head of the firm's emerging market portfolio management team, as well as other bond portfolios in domestic and global fixed income.
  • . Fifteen years with the IMF, leading policy work on debt and country issues.
  • . Treasury Department from 1997 to 2001, where he worked extensively on the reform of international financial architecture, sovereign debt restructurings, and U.S.
  • . Setser worked on the IMF's proposals to improve the sovereign debt restructuring process and helped to explore the implications of balance sheet analysis for crisis prevention and crisis resolution.
  • . Setser was an international affairs fellow at the Council on Foreign Relations, where he worked on Bailouts or Bail-ins and was a commentator on sovereign debt, currency reform and the financing of Iraq's reconstruction for CNN international, CNBC and financial press.

    Paul Kedrosky's Infectious Greed: Emerging Markets vs. the Auto Industry
  • . Dramatic improvements have been shown in the health of corporate balance sheets, achieved through earnings growth and debt reduction.
  • . The result? Many emerging market debt issues now have a better overall credit ratings than General Motors and Ford .
  • . If I had a choice between putting 100% of my retirement fund in GM bonds or the sovereign debt of Poland, I'd go with the Zloties, unless I only had 6 months to live.
  • . agency guaranteed FNMA mortgage at a higher yield than almost all emerging market debt, then there exists an irrational pricing of credit.

    Executive Jobs and Recruiters: Senior Sales/Finance Executive - California
  • . Responsible for the origination, structuring, marketing, pricing and execution of over $25 billion in debt new issuance from the Asia-Pacific, Eastern European, African and Latin American Regions.
  • . · Partnered with capital markets in the origination and pitching of innovative and complex debt securities as well as various capital market opportunities.
  • . Vice President – Asia-Pacific Debt Syndicate (1996 – 1998) Hong Kong Responsible for the marketing and distribution of all Global, Yankee and 144A new issuance from the Asia- Pacific region.
  • . · Created and introduced weekly global conference calls and reporting mechanisms for syndicate managers globally to improve productivity, efficiency and innovative financial solutions for borrowers · Assisted in the marketing and origination of debt new issuance in the region.

  • Benefits

    Photo by www.emerging-market.be

    Identify Emerging Market Opportunities : HBS Working Knowledge
  • . Multinationals can’t count on raising debt or equity capital locally to finance their operations.

    New risks, big rewards? The future of emerging markets | Markets | Stocks | Canadian Business Online
  • . Treasury bill and emerging-market debt--but, in the bond market, that's a huge spike.
  • . So when the spread between the two bond classes widened by 60 basis points in mid-April, it put a troubling question into the minds of debt watchers: Are the good times in emerging market assets coming to an end? Emerging markets have certainly been providing a great ride.
  • . "The government isn't issuing debt--they're paying it down." There's a similar situation in Mexico.
  • . "What you've had is an alignment of understanding between the ruling class and population that economic discipline makes sense." Recent events in Argentina--where a populist government is haggling with debt holders over the debt it defaulted on in 2001--seem to run counter to the thesis, but El-Erian suggests that is the exception, not the rule.
  • . "Debt markets may be rich, but equity markets are pricing in a lot of risk relative to emerging-markets bonds that we think is not there, " says Mattiko.

    Statement by Hans Hoogervorst, Minister of Finance of the Netherlands, IMFC Meeting, Washington, D.C., September 28, 2002
  • . During the first part of this year, many observers noted with satisfaction that Argentina's debt default had not infected its neighbours.
  • . The first is the new framework for debt sustainability as part of the Fund's work in crisis prevention and crisis resolution.
  • . This framework is especially valuable as it considers both external and public debt sustainability, employs stress tests to examine the effects of various shocks, and highlights the interlinkages between exchange rate fluctuations and debt dynamics, which reflect a key feature of the situation in Latin America.
  • . The second initiative is the impetus given to the discussion on ways to smooth debt restructuring processes.
  • . We welcome the efforts by the IMF to make progress on the specific design of the Sovereign Debt Restructurering Mechanism proposal as well as the promising first results of the work by the G10 deputies to devise new collective action clauses and to encourage their widespread use.
  • . Crisis prevention: an early warning system for unsustainable debts My constituency applauds the progress made with regard to the FSAP and ROSC initiatives that emerged from the Asian crisis.

  • . At that time, he joined Fidelity's High-Income Division, and served as a sovereign debt analyst until 1998.


    Emerging Card Markets : Market Research Report

  • . The key issues affecting the emerging payment cards makes are the mounting credit card debts being incurred by individuals and the regulatory changes which are assisting the growth in credit cardholders.

    DERIVATIVES WEEK : Derivatives, Swaps, Options & Structured Finance News
  • . Next week, Fitch Ratings will release a model for rating synthetic collateralized debt obligation combination notes.
  • . Three senior collateralized debt obligation staff have separately exited The Royal Bank of Scotland in London.
  • . Vertical Capital, a USD5 billion structured finance asset manager partly owned by Bank of America, is issuing a second tap of its first synthetic collateralized debt obligation.
  • . London-based asset manager North Asset Management is building up its structured credit team and has added Daud Hamidi, a portfolio manager at Financial Security Assurance in London, to work on collateralized debt obligations, including portfolio selection.
  • . The major rating agencies are investigating methods which will allow them to rate the volatility risk of tranches of synthetic collateralized debt obligations.
  • . Traditional long-only credit fund managers have started taking on short exposures in collateralized debt obligations to hedge macro and idiosyncratic credit risks.

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