Inflation ( CCPI)1.7% (June 2024)
GDP5.3% (1Q 2024)
Unemployment4.3% (4Q 2023)
3M T-Bill Rate9.14%
12M T-Bill Rate9.95%
2Y T-Bond Rate10.10%/ 10.20%
4Y T-Bond Rate11.60% / 11.70%
USD/LKR303/304
Reserves $5.6Bn (June 2024)
Cum. Trade Deficit $2,180 Mn (May 2024 cumulative)
Cum. Fiscal DeficitLKR 361Bn (April 2024)

Dollar bonds in distressed Emerging Markets including Sri Lanka offer once in a life time returns in 2023

InternationalNov 30, 2023
Dollar bonds in distressed Emerging Markets including Sri Lanka offer once in a life time returns in 2023

Nearly 20 nations have faced economic distress, with Sri Lanka and Ghana defaulting since 2022. Nonetheless, the significant strides taken by these countries in restructuring their debts have considerably alleviated the risk premium, yielding returns over nine times higher than those in emerging markets.

El Salvador alone generated a 103% return after it won over investors with dollar-bond buybacks. It’s followed by Pakistan, Asia’s biggest recipient of loans from the International Monetary Fund. Defaulted bonds of Sri Lanka and Zambia have advanced on expectations that the restructuring process should be concluded soon, returning more to investors than some worst-case expectations.

Disclaimer

Charts represents an assessment of the market environment as of the date indicated and it is subject to change; and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

The information presented does not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy or investment decision. This document contains general information only and does not take into account an individual’s financial circumstances. An assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decisions.