By Boris Korby and Camila Russo for Bloomberg/Businessweek (businessweek.com)Argentine bonds are trading at the lowest yields relative to U.S. Treasuries since February 2008 amid the highest commodity prices in two years and improving forecasts for the nation’s corn harvest.
The extra yield investors demand to own Argentine dollar bonds instead of Treasuries dropped 10 basis points to 462 yesterday from 496 on Dec. 31, JPMorgan Chase & Co. indexes show. Dollar bond spreads are 296 basis points over those from neighboring Brazil, the lowest since April 2008 and down from 628 in May.
Investors are growing more confident in Argentina as a UBS Bloomberg commodities index that tracks prices for everything from metals to agriculture climbed to the highest since July 2008 last week, driving its return since the end of 2008 to 59 percent. Argentine debt will extend the rally should the country’s economic growth, the fastest since 2005 last year, keep outpacing the average for emerging markets, according to Vitali Meschoulam, a strategist at Morgan Stanley in New York.
“Argentina is a commodity exporter and the bottom line is that it’s as simple as.. Read full article
