The value of trading in emerging markets fixed-income instruments totaled $1.7 trillion in the first quarter of 2007, an increase of 4% from the same period a year earlier, according to EMTA, formerly the Emerging Markets Traders Association. This was the highest quarterly turnover since EMTA began compiling the statistics in 1997.
“The rise of first-quarter 2007 volume shows the ongoing appetite for emerging markets debt,” says David Spegel, global head of emerging markets strategy at ING Financial Markets in New York. Spegel says he was surprised that the total was not even higher considering the 17% increase in new debt issuance in emerging markets in the first quarter of this year compared to 2006.“This may reflect the period of uncertainty from the end of February to mid-March, which may have depressed trading activity on a year-on-year comparison,” he says.
Mexican debt was the most frequently traded, with $407 billion of nominal value in the first quarter, up 33% from the first quarter of 2006. Brazilian debt turnover was second at $277 billion but was down 37% from the same period a year earlier.
The survey includes secondary market trading in sovereign and corporate Eurobonds, local treasury bonds and other instruments.