Strong Emerging Markets Bonds and Currencies: mexican peso leads against U.S, dollar.
Rio do Janeiro by night
Last weeks emerging markets have gained speed. Investors are looking there for good investment opportunites in spite of emerging markets bumpy ride during the third week of April as China’s latest measures to curb real estate speculation, concerns about tighter regulation of the global financial sector and fresh uncertainty about the outlook for the euro zone gave investors plenty of reasons to book recent gains.
However, emerging-market bond funds took in $1.28 billion in the third week of April, a tally second only to the previous week’s record $1.8 billion of inflows, ahead of debt offerings from Egypt and Russia, EPFR Global said.
The funds have attracted $11.6 billion this year, more than the record annual total of $9.7 billion set in 2005, the Massachusetts-based research company said in an e-mail. The extra yield investors demand to own emerging-market debt over U.S. Treasuries fell three basis points to 2.42 percentage points at 1:10 p.m. in London, down from 5.62 percentage points a year ago, according to JPMorgan Chase & Co.’s EMBI+ Index.
Funds investing in local-currency debt continued to account for the biggest portion of inflows, EPFR said. Currency gains are boosting returns on the securities for global investors, prompting Western Asset Management Co. to raise holdings of debt denominated in local currencies instead of dollar notes. Emerging-market currencies strengthened today, led by a 0.4 percent gain in Mexico’s peso against the dollar.READ MORE HERE.