Panama Bonds Unmoved by Martinelli Win

Yields on Panama’s most liquid bonds, the 2015s and 2036, are virtually unchanged after opposition candidate Ricardo Martinelli won the elections by 60% to 37% on May 3, says Kathryn Rooney, senior EM strategist at Bulltick. The yield on the 2015s, which closed at 5.66% Friday, traded at 5.65% the day after the elections. The 2036s, Rooney says, did not move since Friday and stayed at 7.08%. “Although this news was not a market mover, we view the results in a very positive light for the continued positive trajectory in the Panamanian economy,” Rooney says. Martinelli, in Bulltick’s view, will prove to be a very market-friendly president and has declared his intentions to encourage further FDI, boost the passage of an FTA with the US, improve relations with the US, maintain fiscal accounts health, and decrease tax rates. “Given that we do not expect Martinelli to introduce any dramatic changes the Panama’s current policy framework, one that has served the country well, we view the outcome of yesterday’s election as credit neutral,” says JPMorgan.