EMERGING MARKETS-Ukraine violence, Venezuela protests alarm investors
By Asher Levine and Natsuko Waki
SAO PAULO/LONDON Feb 19 (Reuters) - Ukraine's sovereign bonds plunged further on Wednesday as a renewed wave of violence hit the capital Kiev, while mounting unrest in Venezuela drove the price of its credit default swaps to near five-year highs.
Protesters poured into a central Kiev square on Wednesday, a day after at least 25 people were killed in demonstrations. Protests that began in November have hit the heavily indebted economy and drained the central bank of foreign reserves.
Russia is a key supporter of Ukraine President Viktor Yanukovich but has so far agreed to pay only $2 billion of a promised $15 billion aid package. Protestors are demanding Ukraine embrace a wide-reaching trade deal with the European Union, over Russia's objections.
"We are worried that the interests of the actors are very hard to align," Graham Stock, head of emerging markets sovereign research at Bluebay Asset Management, told an Emerging Markets Trade Association meeting late on Tuesday.
"If the street wins, there is no cash from Russia. If Russia wins, the street remains active."
Prices for Ukraine's dollar bonds fell across the curve, extending early losses. The 2020 dollar bond lost 0.41 cents of a dollar while 2014 bonds fell over 4 cents . The bond maturing in 2023 hit all-time lows of 77.58 cents.
The cost of insuring Ukraine's debt for five years also shot up to 1,304 basis points, the highest since December 2009, according to Markit. Continuación...