(Translated by https://www.hiragana.jp/)
Capital flows to Latin America: second quarter 2003
IDEAS home Printed from https://ideas.repec.org/p/ecr/col896/28823.html
   My bibliography  Save this paper

Capital flows to Latin America: second quarter 2003

Author

Listed:
  • -

Abstract

In the first half of 2003, emerging debt markets rallied, as disillusionment with equities, geopolitical concerns, and doubts about growth prospects led investors to shift from equities in favor of fixed incomes securities. As equity prices in the United States struggled early in the year, and the price of U.S. Treasuries rose to a 40-year high, attention was drawn to emerging market assets. Emerging debt markets were driven by liquidity, rising risk tolerance, a search for yield and a wider investor acceptance of the asset class. As a consequence, credit spreads on emerging market bonds narrowed significantly from the distressed levels of the fall of 2002. In the second quarter, broad investor interest, lower risk aversion and market liquidity fueled a strong rally in emerging and Latin American bond markets, with bond spreads tightening 124 and 172 basis points, respectively. Issuers in emerging markets and Latin America benefited from the decline in spreads, as well as from the greater interest in their bonds by crossover investors. The first half of 2003 showed the strongest supply of new emerging markets debt since 1998: a total of US$43.4 billion, or 80% of the total issuance in 2002, according to Merrill Lynch. With a total issuance of US$22.4 billion (52% share of the total), Latin America surpassed last year's amount of US$20.2 billion. After an Iraq war induced slowdown in March, emerging market debt issuance rose in April, in May and in June, consecutively. June 2003 issuance was nearly three times as high as it was in June of 2001 and 2002. In addition, the size and structure of emerging markets external debt continued its transformation from an asset class of restructured loans, to one consisting primarily of global bond issues, as country liability management operations increased. In June, Mexico called all its remaining Brady debt, marking a milestone. The Central American and Caribbean region continued to be hit by a wave of downgrades and negative rating actions in the second quarter, with a total of five countries remaining on negative outlook: Costa Rica, Dominican Republic, El Salvador, Guatemala and Jamaica. Central America is suffering the effects of election tensions, given that elections will take place in the Dominican Republic, El Salvador and Panama next year. The Dominican Republic has also been struggling to piece its economy together after the collapse of Banco Interncontinental (Baninter) earlier this year. The smaller credits of the Caribbean Basin are also struggling to manage their way through domestic political tensions and a re-rating of creditworthiness prompted by Moody's decision to review the ratings of countries with highly dollarized banking systems.

Suggested Citation

  • -, 2003. "Capital flows to Latin America: second quarter 2003," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28823, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col896:28823
    Note: Includes bibliography
    as

    Download full text from publisher

    File URL: http://repositorio.cepal.org/handle/11362/28823
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mehdi Amiri & Ahad Jamalizadeh & Mina Towhidi, 2015. "Inference and further probabilistic properties of the $$ SUN_{n,2}$$ S U N n , 2 -distribution," Statistical Papers, Springer, vol. 56(4), pages 1071-1098, November.
    2. Luis H. Gutiérrez & Carlos Pombo & Rodrigo Taborda, 2005. "Propiedad y control en empresas colombianas," Research Department Publications 3221, Inter-American Development Bank, Research Department.
    3. Norman Loayza & Pablo Fajnzylber & César Calderón, 2005. "Economic Growth in Latin America and the Caribbean : Stylized Facts, Explanations, and Forecasts," World Bank Publications - Books, The World Bank Group, number 7315.
    4. Gutierrez, Luis H. & Pombo, Carlos & Taborda, Rodrigo, 2008. "Ownership and control in Colombian corporations," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(1), pages 22-47, February.
    5. Maria Carolina Basso, 2016. "A Economia Brasileira Sob Restrição Do Balanço De Pagamentos: Uma Análise Empírica Da Lei De Thirlwall No Boom Das Commodities," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 089, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Henri Audigé, 2014. "Net flows to emerging markets’ funds and the U.S. monetary policy after the subprime crisis," EconomiX Working Papers 2014-23, University of Paris Nanterre, EconomiX.
    7. McLachlan, Geoff & Lee, Sharon X, 2013. "EMMIXuskew: An R Package for Fitting Mixtures of Multivariate Skew t Distributions via the EM Algorithm," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 55(i12).
    8. Juann H. Hung & Young Jin Kim, 2006. "Implications of Past Currency Crises for the U.S. Current Account Adjustment: Working Paper 2006-07," Working Papers 17861, Congressional Budget Office.
    9. Julian Donaubauer & Eric Neumayer & Peter Nunnenkamp, 2020. "Financial market development in host and source countries and their effects on bilateral foreign direct investment," The World Economy, Wiley Blackwell, vol. 43(3), pages 534-556, March.
    10. Yangxin Huang & Tao Lu, 2017. "Bayesian inference on partially linear mixed-effects joint models for longitudinal data with multiple features," Computational Statistics, Springer, vol. 32(1), pages 179-196, March.
    11. Komárek, Arnošt & Komárková, Lenka, 2014. "Capabilities of R Package mixAK for Clustering Based on Multivariate Continuous and Discrete Longitudinal Data," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 59(i12).
    12. César Calderón & Norman Loayza & Klaus Schmidt-Hebbel, 2006. "External Conditions and Growth Performance," Central Banking, Analysis, and Economic Policies Book Series, in: Ricardo Caballero & César Calderón & Luis Felipe Céspedes & Norman Loayza (Series Editor) & Klaus Sc (ed.),External Vulnerability and Preventive Policies, edition 1, volume 10, chapter 3, pages 041-070, Central Bank of Chile.
    13. Matthias Finger & Rolf W. Künneke (ed.), 2011. "International Handbook of Network Industries," Books, Edward Elgar Publishing, number 12961.
    14. John Marangos & Charles J. Whalen, 2011. "Evolution without fundamental change: the Washington Consensus on economic development," Chapters, in: Charles J. Whalen (ed.), Financial Instability and Economic Security after the Great Recession, chapter 8, pages 153-178, Edward Elgar Publishing.
    15. Ahad Jamalizadeh & Tsung-I Lin, 2017. "A general class of scale-shape mixtures of skew-normal distributions: properties and estimation," Computational Statistics, Springer, vol. 32(2), pages 451-474, June.
    16. Catarina Figueira & David Parker, 2011. "Infrastructure Liberalization: Challenges to the New Economic Paradigm in the Context of Developing Countries," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 27, Edward Elgar Publishing.
    17. Alvaro Cuervo-Cazurra & Luis Alfonso Dau, 2009. "Structural Reform and Firm Exports," Management International Review, Springer, vol. 49(4), pages 479-507, September.
    18. Wan-Lun Wang & Min Liu & Tsung-I Lin, 2017. "Robust skew-t factor analysis models for handling missing data," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 26(4), pages 649-672, November.
    19. Angeles-Castro, Gerardo, 2006. "The relationship between economic growth and inequality: evidence from the age of market liberalism," Proceedings of the German Development Economics Conference, Berlin 2006 2, Verein für Socialpolitik, Research Committee Development Economics.
    20. Tao Lu, 2017. "Bayesian inference on longitudinal-survival data with multiple features," Computational Statistics, Springer, vol. 32(3), pages 845-866, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecr:col896:28823. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca CEPAL (email available below). General contact details of provider: https://edirc.repec.org/data/eclaccl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.