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By Daniel Bases
NEW YORK, March 13 (Reuters) - The trading volume of emerging market debt grew 6 percent to $5.922 trillion in 2014 from the previous year, amid sharp drops in the sector’s currencies, interest rates and key commodity exports, a new survey showed on Friday.
Fourth-quarter volumes, however, declined 8 percent to $1.210 trillion from the same period a year earlier, EMTA, the association for the emerging markets debt trading industry, said in a statement.
“After a poor start to 2014, with a sharp sell-off in EM currencies and rates, the situation improved toward Q2 as EM assets rebounded across the board,” said Christian Keller, managing director and head of global economics research at Barclays.
“However, this reversed again during the summer as the outlook for global growth turned gloomy, commodity prices plunged and the (U.S. dollar) rallied.”
Eurobond trading volumes surged 24 percent to $2.344 trillion last year. Fourth-quarter volumes increased 13 percent to $519 billion versus the same period in 2013.
Sovereign debt trading of $1.145 trillion made up 49 percent of Eurobond activity, down from a 56 percent share in the prior year of $1.073 trillion.
Corporate Eurobond trading of $1.104 trillion was 47 percent of Eurobond activity, up from a 41 percent share in 2013.
Russia’s 2030 Eurobond was the most traded individual issue in the sector at $83 billion. Argentina’s U.S. dollar-denominated Discount bond, at $23 billion, and its U.S. dollar-denominated Par bond, at $19 billion, were second and third.
Both of Argentina’s bonds went into default mid-year. Brazil’s 2025 bond had $17 billion in volume followed by Ukraine’s 2017 bond at $12 billion.
Local market debt instruments, at 60 percent of overall volumes, fell 3 percent to $3.558 trillion in 2014. Fourth quarter volumes plunged 20 percent to $688 billion versus the same period in the prior year.
The most frequently traded local market debt instruments were Mexican at $810 billion, followed by Brazil, India, South Africa and Singapore.
Mexican instruments, overall, were the most traded at $983 billion, representing 17 percent of the total survey. Brazil was second at $682 billion, or 12 percent. Russia was third at $452 billion, or 8 percent.
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 survey. (Editing by Chizu Nomiyama and Bernadette Baum)