LONDON, June 15 (Reuters) – Emerging equities rose 1 percent
on Friday and most currencies stayed just below flat versus the
dollar as talk of coordinated central bank action if necessary
soothed investor fears of market tumult after Sunday’s Greek
election.
G20 officials told Reuters that central banks from major
economies stand ready to provide liquidity and keep dollars
flowing through world markets if the outcome of Greek elections
leads to a credit shock.
The MSCI emerging equity index is on track for its
second straight week of gains after 11 weeks of losses and has
posted the biggest weekly gain so far since mid-February. In
emerging Europe, Russian stocks jumped 1 percent to
three-week highs as oil prices rose slightly.
Russia’s central bank kept interest rates unchanged as
expected, with scheduled corporate tax payments allowing the
rouble to firm moderately against the dollar.
In central Europe the Serbian dinar rose almost 1 percent
versus the euro and 5-year credit default swaps fell
to 428 basis points, the lowest since May 23. The reformist
Democratic Party and its Socialist allies said this week they
had agreed on policy but needed “a few days” to divide up power.
However CDS were on the rise in Egypt which faces a
presidential election this weekend. Debt insurance costs rose to
650 bps, the highest in over three years, after a shock court
ruling dealt a heavy blow to hopes of a peaceful democratic
transition from 16 months of military rule.
Egyptian financial markets were closed on Friday but the
pound fell to 3-week lows after the ruling on Thursday to
dissolve the Islamist-led parliament, while Cairo stocks
, one of this year’s best-performing bourses, fell to
January 2012 lows.
Ivory Coast’s $2.3 billion defaulted Eurobond rose one point
after the country said it would pay the July 2
coupon along with a good-faith payment against arrears.
Ivory Coast is the best performer this year on JP Morgan’s
EMBI Global dollar bond index, returning over 40 percent
on expectations the bond will start to pay out this year.
(Reporting by Sujata Rao; editing by Stephen Nisbet)
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