Guest post: possible knock-on effects of the Ukraine crisis | beyondbrics:
"With the dramatic events in Kiev and beyond, investors are asking what contagion risks are likely from events unfolding in Ukraine to countries in the region, and perhaps global emerging markets.
On the issue of contagion to global EM, the total stock of Ukrainian eurobonds is only around $30bn or so (half the stock of foreign holdings in the Russian devaluation/default of 1998), or a small part of the EM bond stock, and overall investments in Ukraine are a similarly small part of the EM asset class. The asset class should hence be able to ride through a Ukrainian devaluation/default, albeit looking out for concentrated ownership patterns which might create some knock-on impacts in specific countries. That said, the worsening situation in Ukraine adds to the overall perception of heightened risks across EM with political instability now playing out in Ukraine, Turkey, Thailand, and Venezuela. It just adds to the negative mood music."
'via Blog this'
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