December 19, 2018 / 4:27 PM / 3 months ago

Emerging market debt trading fell 7 pct in third quarter -EMTA

NEW YORK, Dec 19 (Reuters) - Turnover in emerging market debt fell more than 7 percent in the third quarter of 2018 compared with the same period a year earlier, a report released on Wednesday showed.

Emerging market debt trading reached $1.205 trillion last quarter, down 7.24 percent from the $1.299 trillion reported in the third quarter of 2017, according to a report by EMTA, the trade association for the emerging markets debt trading and investment industry.

Trading fell 9.2 percent from the $1.327 trillion reported in the second quarter.

“The aggregate volume drop is far from dramatic, and is consistent with the performance of assets and some outflows during the quarter,” Alejandro Cuadrado, managing director and Latin America strategist at BBVA, said in a statement from EMTA.

“The most recent (emerging market) sell-offs have tended to be moderate compared to previous corrections, as real money investors generally do not head for the exit in times of stress.”

Local market instruments turned over $791 billion last quarter, a 7.47 percent increase from $736 billion a year earlier.

Mexican debt instruments were the most traded last quarter both overall, with $223 billion, and in local markets, at $185 billion, EMTA said.

“In Mexico, the presidential election and its aftermath stirred markets and positions, and may continue to do so in coming months in what may be the most scrutinized market of 2019,” said BBVA’s Cuadrado.

Brazil and India were also highly traded according to the survey.

The survey includes debt instruments from over 90 emerging market countries as reported by 44 banks, asset managers and hedge funds, EMTA said. (Reporting by Rodrigo Campos; editing by Chris Reese)

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