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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Emerging-Market Bond Index Rises to Record; Stocks Advance |
By Laura Cochrane and Tal Barak Harif
Nov. 25 (Bloomberg) -- Emerging-market bond returns rose to an all-time high and stocks advanced as the global economic recovery and record-low interest rates spurred demand for higher yielding assets from the world’s fastest growing nations.
JPMorgan Chase & Co.’s Emerging Markets Bond Index, the EMBI+, jumped to 496.75 percent as of 11:25 a.m. in New York, the highest point since JPMorgan’s data began in December 1993. The index, which measures the average return on emerging-market international bonds, has rebounded from as low as 380 in March.
“It’s an abnormal gain on a year-to-date basis, but it looks like emerging-market bonds will gain further and further,” said Luis Costa, emerging-market debt strategist at Commerzbank AG in London.
Developing economies will expand 5.1 percent in 2010, compared with 1.3 percent growth in advanced nations, according to the International Monetary Fund. The faster growth is enticing investors searching for higher-yielding assets, with emerging-market bond funds posting their second-steepest weekly inflows in the seven days ended Nov. 18, EPFR Global data shows.
Developing-nation government bonds traded near the lowest yields on record, dropping 0.6 basis point to an average 6.448 percent yesterday and heading for the biggest annual decline since at least 1998. That rate is still three times more than the 2.17 percent yield on global sovereign bonds, Merrill Lynch & Co. indexes show.
Central banks in developed economies, led by the U.S., cut borrowing costs to pull the world out of the worst recession since World War II. The Federal Open Market Committee said its policy of keeping U.S. rates low might cause “excessive risk- taking,” according to minutes of its Nov. 3-4 meeting released yesterday.
Default Swaps
The cost to protect against a default by emerging-market sovereigns has fallen to an average of 262 basis points from a peak of 800 basis points in March, according to Bloomberg credit-default swap prices on a basket of 44 developing nations. The contracts decline as perceptions of credit quality improve. A basis point equals $1,000 on a contract protecting $10 million from default.
“We had a mis-pricing of default probabilities at the start of the year and now the reality has changed quite a lot,” Costa said.
Emerging-market governments and companies have sold 74 percent more bonds in 2009 than last year, with a sales rising to a record $566 billion, Bloomberg data show. Dubai, whose government and state-owned companies borrowed $80 billion to fund an economic boom, raised $5 billion today by selling bonds to Abu Dhabi-controlled banks.
The EMBI+ Brazil index rose to a record 759.54 percent today, and Panama’s index climbed to 825.49 percent, the highest return among emerging markets tracked by JPMorgan. The EMBI+ Russia increased to 551.38 percent.
Stocks
The MSCI Emerging Markets Index added 0.5 percent to 977.37, led by gains for Chinese and Brazilian commodity producers.
The Shanghai Composite Index rose 2.1 percent.
Brazil’s Bovespa index advanced 0.6 percent after the government said it will extend tax cuts on sales of some cars and trucks.
Finance Minister Guido Mantega said taxes will be kept as low as 3 percent on ethanol and less-polluting vehicles such as so-called flex-fuel cars. Usinas Siderurgicas de Minas Gerais SA, the biggest supplier of steel for the auto industry, climbed 1.1 percent.
Brazil’s real dropped 0.1 percent versus the dollar. The real is the “most overvalued” currency as a “wall of money” coming into Latin America’s biggest economy may overwhelm government efforts to curb its rally, Goldman Sachs Group Inc. said.
To contact the reporter on this story: Laura Cochrane in London at lcochrane3@bloomberg.net
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