| NEW YORK, Sept 5
NEW YORK, Sept 5 Trading volumes of emerging
market debt rose five percent in the second quarter of 2014
versus the same period a year ago, and for the first time ever
trading of corporate Eurobonds exceeded that of sovereign
Eurobonds, a new survey showed on Friday.
Overall trading volumes of emerging market debt reached
$1.668 trillion, up from $1.587 trillion in the second quarter
of 2013 and a 5 percent increase over the first three months of
this year, according to EMTA, the trade association for the
emerging markets debt trading industry.
"It's not surprising to see higher EM trading volumes in the
second quarter, as market participants have become more attuned
to risks in EM and are willing to weather volatility-inducing
situations such as the ongoing Russia-Ukraine crisis," Robert
Abad, portfolio manager at Western Asset Management Company in
Pasadena, California, said in EMTA's statement.
Abad noted how investors were trading more within the
emerging market sector rather than simply pulling cash out,
wholesale, demonstrating more resiliency to geopolitical
Corporate Eurobond trading volumes totaled $323 billion in
the second quarter, accounting for 51 percent of total Eurobond
activity. Sovereign Eurobond trading volumes were $291 billion
in the same period, down from $302 billion in volume from the
first quarter of the year.
Russia's 2030 bond was the most actively traded Eurobond at
$20 billion, followed by Argentina's U.S. dollar-denominated
Discount bond at $10 billion, Argentina's U.S.
dollar-denominated Par bond at $6 billion, Brazil's 2025 bond
with $4 billion in turnover and Venezuela's state-owned oil
company PDVSA's 2026 bond at $3 billion.
Overall, Eurobond trading volumes were up 16 percent in the
second quarter to $632 billion versus the same period a year
ago. Volumes rose 6 percent from the first quarter of 2014.
EMTA said there was "no trading of the few remaining Brady
bonds, instruments that played a crucial role in the EM
industry's birth two decades ago," only the second time that has
happened in the 17-year history of the survey.
Local-currency denominated bond trading volumes slipped less
than 1 percent to $1.033 trillion in the second quarter, making
up 62 percent of overall emerging market debt trading volumes.
In local-currency debt trading, Mexico was the most active
at $217 billion, followed by Brazil at $189 billion, India at
$109 billion, Singapore at $61 billion, and South Africa at $57
Mexico was also the most actively traded when both local and
hard currency volumes were combined, with $258 billion in
turnover. That is a 32 percent increase over the same period a
year ago, but down 6 percent from the first quarter of 2014.
Brazilian debt instruments were second at $248 billion, a 10
percent increase over the year-ago period and 68 percent surge
over the first quarter. Russia was third with $126 billion, down
28 percent in the year-ago period and down 7 percent from the
first quarter of 2014.
(Editing by Paul Simao)