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Laxman Pai, Opalesque Asia: Emerging markets debt trading volumes fell 7% in the fourth quarter of 2018 compared with the same period a year earlier said a report.
According to a report by Emerging Markets Traders Association (EMTA), emerging market debt trading stood at $1.067tn last quarter, down 6.97% from the $1.147tn reported in the fourth quarter of 2017.
Trading fell 11.45% from the $1.205tn reported in the third quarter of 2018.
The trade association for the emerging markets debt trading and investment industry also revealed that turnover in emerging market debt stood at $4.879tn in 2018, which was slightly less than the $4.901tn reported in 2017.
Jeff Grills, Senior EMD Portfolio Manager at Gramercy Funds Management, said: "overall, 2018 EM debt was pressured due to the rise in US Treasury rates, and from specific EM credit events which curtailed issuance, namely Russian sanctions in April, as well as difficulties in Argentina and Turkey in the second half of the year. This led to declines in EMD returns and impacted the demand for primary issuance as a result."
He added: "By the fourth quarter we saw a further drop in issuance, primarily by EM corporate issuers, as the uncertainty about the future FOMC rate path caused increased volatility across the globe."
Turnover in local markets instruments stood at $2.987tn in 2018, accounting for 61% of total reported volume. This compares to $2.747tn in 2017, a 9% increase.
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