Fixed Income
The slide in quotes for Ukrainian sovereigns accelerated markedly in recent days, with Ukraine-23s plunging 9.4% to 84.4/85.4 (10.0%/9.8%) last week (including an additional decline on Monday, Jun 24, which was a holiday in Ukraine). The outflow from emerging market funds that started in mid-May has hit the Ukrainian Eurobond universe hard, as relatively low liquidity has left even the top issues without support from bargain hunters. However, some fund managers report that they are now adding to their positions in emerging markets on expectations of a quick rebound, with yields having risen to more attractive levels. Short term Ukraine-14s slipped 1.4%, ending at 97.8/99.1 (10.5%/9.0%), and quasi-sovereign Naftogaz-14s dropped 2.3% to 98.1/99.5(11.2%/9.9%).
