EMERGING MARKETS-Ukraine bonds firm; Latam currencies rise

lunes 17 de febrero de 2014 14:31 GYT
 

(Updates prices, adds Latin America, Nigeria, quote)
    By Asher Levine and Natsuko Waki
    RIO DE JANEIRO/LONDON, Feb 17 (Reuters) - Ukraine's
sovereign bonds rose across the board on Monday after opposition
protesters ended a two-month occupation of Kiev's city hall,
while Latin American currencies mostly advanced, tracking global
weakness in the dollar.
    Ukrainian opposition protesters opened a road to limited
traffic, meeting an amnesty offer aimed at easing a stand-off
over President Viktor Yanukovich's rule. Meanwhile, authorities
withdrew riot police from a flashpoint district of the capital.
    Ukraine's dollar bonds maturing in 2014, 2020 and 2023 all
rose around one to two points  
. But the country's hryvnia currency fell 0.8
percent on the day to 8.84 per dollar, in trading thinned
by a market holiday in the United States.
    Earlier this month Ukraine put in place capital controls to
help stem a slide in the hryvnia. The measure prevents large
clients from buying dollars to pay down credit ahead of schedule
or make investments abroad and requires importers to deposit
money in a dedicated account for six days before it is used to
buy foreign currency.
    "Activity is small today. Tomorrow, we are likely to see
very large activity," said a Kiev-based trader. Another trader
said, "(We) hope the central bank steps in tomorrow to prevent
the potential weakening of the hryvnia."
    Concerns are rising over the central bank's ability's to 
support the hryvnia, given that it has spent about eight 
percent of its reserves on currency intervention in January
alone, leaving them at $18 billion, an eight-year low.    
    "The National bank of Ukraine is running out of foreign
exchange reserves so it's inevitable for the currency to fall,"
said Neil Shearing, chief emerging market economist at Capital
Economics.
    Latin American currencies mostly strengthened as investors
continued to weigh the outlook for U.S. growth following soft
economic data last week, which has sapped demand for the
greenback in global markets. 
    Brazil's real and Mexico's peso both rose
about 0.3 percent.
    Argentina's peso gained its most in nearly two weeks
as banks continued to sell dollars to adjust to a central bank
rule change earlier this month that limits their net foreign
currency positions.
    Yields on Brazilian interest rate futures fell
after a weekly central bank poll showed economists expect
Brazil's economy to grow just 1.79 percent in 2014, down from a
1.9 percent estimate a week earlier.
    "People are seeing that the central bank may be less
aggressive (in hiking rates)," said Silvio Campos Neto, an
economist with Tendencias in Sao Paulo.
    The benchmark MSCI emerging market share index 
rose 0.8 percent after data showed Chinese banks disbursed the
highest volume of loans in any month in four years in January,
suggesting the world's second-biggest economy may not be cooling
as much as some fear. 
    China is a key purchaser of commodities such as iron-ore,
soybeans and copper from other developing nations.
    MSCI's Latin American stock index was little
changed, however, as a fall in steelmaking shares pushed
Brazil's Bovespa stock index slightly lower.
    Brazil's raw steel output fell 1.4 percent in January on an
annual basis, data showed on Monday.
    
    
    
    MARKETS SETTLE
    Expectations that the U.S. Federal Reserve would not disrupt
its gradual pace of monetary stimulus withdrawal also helped
boost emerging markets, many of which had been pummeled in
recent weeks on concerns over regional political crises and the
Fed's policy moves.
    "(Chinese data) was obviously strong which is good for
near-term growth. More generally, the market has taken a more
sanguine view of Fed tapering," Shearing said. "For now the
market seems to have settled down."
    In the week to Feb. 12, investors withdrew almost $4.5
billion out of emerging bond and equity funds, with equity funds
seeing their 16th straight week of outflows. 
    Since the start of the year, investors have pulled more than
$21 billion from emerging equity funds tracked by EPFR, compared
to $15.2 billion in the whole of 2013.
    The focus will be on monetary policy meetings in Hungary and
Turkey, both due on Tuesday, dealers said. 
    Elsewhere, Nigeria's naira pared early losses against
the dollar after the central bank offered to sell $600 million
at its twice-weekly forex auction on Monday, its highest offer
in two years. 
    
    For GRAPHIC on emerging market FX performance 2014, see link.reuters.com/jus35t
    For GRAPHIC on MSCI emerging index performance 2014, see link.reuters.com/weh36s
    For GRAPHIC on MSCI emerging Europe performance 2014, see link.reuters.com/jun28s
    For GRAPHIC on MSCI frontier index performance 2014, see link.reuters.com/zyh97s
    For CENTRAL EUROPE market report, see 
    For TURKISH market report, see 
    For RUSSIAN market report, see )

 (Additional reporting by Marcin Goettig in Kiev and Bruno
Federowski in Sao Paulo; Editing by Catherine Evans and Diane
Craft)