| NEW YORK, March 27
NEW YORK, March 27 Trading volumes of emerging
market debt edged just slightly higher in 2013 versus the prior
year, reflecting investor concerns over changing monetary
policies and global economic growth prospects, a new survey
showed on Thursday.
The volume of emerging market debt rose to $5.571 trillion
last year, an increase of just 0.22 percent versus the $5.559
trillion that changed hands in 2012, according to EMTA, the
trade association for the emerging markets debt trading
Trading volumes did rise 4 percent in the fourth quarter of
last year to $1.320 trillion compared to $1.269 trillion in the
same period of 2012.
"2013 was a year of pessimism for EM (emerging markets),
characterized by investor outflows from the asset class prompted
by the US FOMC's warning of 'tapering' in May, as well as rising
US Treasury yields and concerns over EM growth," Joyce Chang,
global head of fixed income research at JPMorgan, said in EMTA's
In the third quarter of last year volumes fell 20 percent as
origination of corporate bonds dried up. It was also the period
where emerging market assets felt the broader impact of the
first hints of tapering of asset purchases by the Fed.
Local currency market debt trading volumes slipped as well,
down 2 percent to $3.654 trillion in 2013 versus $3.726 trillion
in 2012, EMTA said.
Turnover of local market instruments made up 66 percent of
overall emerging market trading volumes for the full year ended
Dec. 31, 2013. In the fourth quarter there was a slight rebound
in activity, with a rise of 5 percent in trading volumes to $857
billion compared to the same period in the prior year.
The most actively traded local market debt instruments were
from Brazil with $705 billion in turnover, followed by $594
billion in Mexico, $321 billion in India, $264 billion in Russia
and $255 billion in Turkey.
While local market trading volumes fell, Eurobond trading
increased by 5 percent for the year to $1.890 trillion. It was a
similar increase in the fourth quarter with a rise of 5 percent
to $458 billion for instruments traded in hard currencies
including U.S. dollars, euros or yen.
"Despite the slowdown in inflows to EM debt, the increased
Eurobond trading volumes in 2013 reflect record EM corporate and
sovereign bond issuance, which combined reached a record $437
billion," said Chang. She added: "Since the beginning of the
year, EM corporates and sovereigns have issued $144 billion and
we expect EM corporate bond issuance to remain strong this year
at $295 billion."
Sovereign debt made up 57 percent of Eurobond transactions,
and 19 percent of the survey's overall volume. Trading of
sovereign Eurobonds rose to $1.073 trillion in 2013 versus $996
billion in 2012.
Corporate Eurobond trading held steady around $779 billion.
Russia's 2030 Global bond was the most
actively traded individual emerging market Eurobond, with $59
billion in annual turnover. It was followed by Brazil's 2023
Global bond with $15 billion in transactions.
Russia's 2042 Global bond, Brazil's 2041 Global
bond and Mexico's 2044 Global bond all
had around $13 billion each in turnover last year.
The top three nations in terms of trading across Eurobond
and local debt markets all saw decreases in activity last year.
Brazil was first, with $902 billion traded, representing a 4
percent year-on-year decline. Mexico was second with $748
billion, a 7 percent drop. Russia was third, with a decrease of
3 percent to $499 billion.
EMTA gets trading volumes for over 90 emerging market
countries as reported by 50 leading investment and commercial
banks, asset management firms and hedge funds to compile its
(Reporting By Daniel Bases; Editing by Bernard Orr)