LatAm Leads Wilting EM Debt Trade

Trading in LatAm debt fell in Q3, according to an EMTA survey, but it still accounted for 39% of the EM total, the largest share for any region. “Trading in emerging markets debt instruments fell to its lowest levels in five and a half years during the third quarter of 2008,” says EMTA. LatAm’s total of $367.0bn traded in the quarter marks a drop of 24% from 2Q and 58% from 3Q2007. The region’s volume is also the lowest since the $351bn registered in Q1 1999, EMTA says. Brazil’s level of $203.8bn represents a fall of 16% from 2Q, but it remains the most traded debt in EM, with its 2040 Eurobond still the single most traded instrument at $17.2bn in flow. Argentina registered the fourth-highest EM volume in the quarter with $72.4bn. EM trading overall also fell, to $946bn in Q3, its lowest level since 2003, representing a 43% drop from a year ago, and 22% from Q2. Turnover in local markets instruments stood at $643.3bn, falling 46% from Q3 2007 and 22% from Q2. The $141.0bn traded in Brazil local instruments also led EM. EMTA’s survey includes data from 54 firms active in EM trading and investment.