Venezuelan bonds rallied after opposition candidate Henrique Capriles Radonski scored more than 60 percent of the vote in a nationwide primary, a landslide win that analysts said could strengthen his bid to unseat President Hugo Chavez in October elections.
The yield on Venezuela’s benchmark 9.25 percent bonds due in 2027 fell 18 basis points, or 0.18 percentage point, to 11.91 percent at 9:50 a.m. in New York, according to data compiled by Bloomberg.
The bond’s price rose 1.08 cents to 81.32 cents on the dollar, the highest since April 2010.
Capriles, a 39-year-old governor of Miranda state who promises to gradually unwind Chavez-imposed state controls on the economy, won the South American country’s first presidential primary with 1.8 million votes.
The margin of victory and stronger-than-expected voter turnout of almost 3 million people increase the possibility of a “democratic and peaceful transition” in 2013, providing support to Venezuelan assets, Barclays Plc said in a note to clients.
“The global risk rally has helped Venezuelan bonds but the political issue is beginning to be a catalyst that could give them more of a boost,” Alejandro Arreaza, an analyst at Barclays in New York, said in a phone interview.
“Even though Capriles is behind in polls for the presidential election, with this momentum he could close the gap quickly and he emerges as a strong leader of a unified opposition.”
Pablo Perez, who had 30 percent of the vote, and Maria Corina Machado, with about 5 percent of the vote, both announced their support for Capriles after yesterday’s primary.
Yield Spread
Chavez, 57, has said that he will win a third-consecutive six-year term in presidential elections on Oct. 7 regardless of who the opposition candidate is.
He says that he’s now “cancer free” after having a tumor removed in June and receiving chemotherapy treatment late last year.
The extra yield investors demand to own Venezuelan bonds over U.S. Treasury bills narrowed 28 basis points to 1,057 today, according to JPMorgan Chase & Co.’s EMBI Global index.
“We expect a post-nomination boost in Capriles’ poll numbers, but also expect this boost to be temporary,” Francisco Rodriguez, an economist at Bank of America Corp. in New York, said in a note to clients. “We continue to see a Chavez victory in the October elections as the most likely scenario.”
bloomberg.com
The yield on Venezuela’s benchmark 9.25 percent bonds due in 2027 fell 18 basis points, or 0.18 percentage point, to 11.91 percent at 9:50 a.m. in New York, according to data compiled by Bloomberg.
The bond’s price rose 1.08 cents to 81.32 cents on the dollar, the highest since April 2010.
Capriles, a 39-year-old governor of Miranda state who promises to gradually unwind Chavez-imposed state controls on the economy, won the South American country’s first presidential primary with 1.8 million votes.
The margin of victory and stronger-than-expected voter turnout of almost 3 million people increase the possibility of a “democratic and peaceful transition” in 2013, providing support to Venezuelan assets, Barclays Plc said in a note to clients.
“The global risk rally has helped Venezuelan bonds but the political issue is beginning to be a catalyst that could give them more of a boost,” Alejandro Arreaza, an analyst at Barclays in New York, said in a phone interview.
“Even though Capriles is behind in polls for the presidential election, with this momentum he could close the gap quickly and he emerges as a strong leader of a unified opposition.”
Pablo Perez, who had 30 percent of the vote, and Maria Corina Machado, with about 5 percent of the vote, both announced their support for Capriles after yesterday’s primary.
Yield Spread
Chavez, 57, has said that he will win a third-consecutive six-year term in presidential elections on Oct. 7 regardless of who the opposition candidate is.
He says that he’s now “cancer free” after having a tumor removed in June and receiving chemotherapy treatment late last year.
The extra yield investors demand to own Venezuelan bonds over U.S. Treasury bills narrowed 28 basis points to 1,057 today, according to JPMorgan Chase & Co.’s EMBI Global index.
“We expect a post-nomination boost in Capriles’ poll numbers, but also expect this boost to be temporary,” Francisco Rodriguez, an economist at Bank of America Corp. in New York, said in a note to clients. “We continue to see a Chavez victory in the October elections as the most likely scenario.”
bloomberg.com
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