denotes premium content | Jan 6 2009 
Regular
posted 23 Feb 2005 in Volume 8 Issue 4
Country Risk Appetite – January 2005
The analysis from Standard Bank London:
The trade market has maintained its strength since our last commentary, with the spread compression trend still firmly in place. Developments over the last few weeks have been generally positive.
With end of year syndications now completed, attention turns to the new borrowers for 2005: Russia sees further issuance from the second-tier banks, new deals are forthcoming from Kazakhstan, and the market for Ukraine trade-loans should re-open next month after Yushchenko was returned to power in the re-run of the presidential election, bringing with it an end to six months of political crisis. New deals are also on the slate for North African banks.
Support for Turkey from the EU on 17 December, and subsequent upgrades, have resulted in prices falling rapidly; despite this, a good volume of new supply has been seen, quickly absorbed by new year portfolio building by investors. Reluctance will come to the declining margins, and longer tenors can be anticipated soon in the loan and trade markets for the better quality names.
Significant supply is still available in Iranian risks but pricing has stabilised and appears to be gradually tightening on a lack of any recent adverse news.
Elsewhere, in Asia, Chinese turnover remains strong and activity from Bangladesh and Pakistan names has been seen. With spreads unattractive for the majority of Latin American bank borrowers, attention has turned to the corporate sector – particularly in Mexico and Brazil – where better value is perceived.
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