Panama Canal Vote Cheers Investors

This weekend Panamanians are likely to vote “yes” in a national referendum on the proposed $5.25 billion plan to expand the country’s Canal to accommodate so-called “post-Panamax” vessels. A research note from investment bank Morgan Stanley expects Panama’s positive debt outlook to be bolstered by a “yes” vote and that it could “settle in at sub 100 bp levels for five-year CDS”. The Bank commented that Sunday’s vote is broadly seen as a referendum on the Torrijos administration, which is currently enjoying an approval rating of over 65%. Morgan Stanley added in the note that it expected the country to grow by over 7% this year and keep inflation contained at around 2%.