LONDON (Reuters) - Lebanon’s dollar bonds rallied on Thursday after parliament looked set to resume next week and U.S. President Donald Trump said Washington was ready to work with a new Lebanese government.
Several Lebanese bonds made their biggest daily gains since early November. The 2032 XS1586230481=TE and 2030 issues XS1196419854=TE both rose by 1.4 cents to 44 cents in the dollar, according to Tradeweb data.
Bonds prices fell to record lows in recent weeks as anti-government protests brought the country to a political standstill following Prime Minister Saad al-Hariri’s resignation on Oct. 29. Parliament has not sat in two months, and a session was postponed on Tuesday due to protests.
However, parliament’s speaker said on Thursday that a session would take place next Wednesday.
Some financial market observers have said the record low bond prices indicate the country may have to default on or restructure some of its debt.
“The problem in Lebanon is reaching consensus and the political class reaching consensus and doing the right thing. Until you get the political class swept away and a new one comes into power I don’t see an end game yet,” said Richard House, chief investment officer, emerging market debt, at Allianz Global Investors.
The parliament session called by Speaker Nabih Berri is crucial to discuss draft legislation on banking secrecy and returning stolen state funds.
Anger about perceived corruption among the country’s elite has been one of the drivers of the demonstrations.
The market also benefited after Trump told Lebanese President Michael Aoun in a cable that the United States would work with a new Lebanese government that responds to the needs of its people.
Reporting by Tom Arnold; editing by Sujata Rao and Susan Fenton