“The wild card remains Russia and Ukraine,” Marco Ruijer, who helps oversee about $8 billion in emerging-market bonds at ING Investment Management in The Hague, said by e-mail. “As long as there is no escalation, sentiment will slowly improve. New issues will be plenty.”
The market’s attention has shifted to whether Putin will seek to claim other parts of Ukraine as Russia masses troops along the border with its neighbor. President Barack Obama warned yesterday that Russia’s actions in Ukraine “aren’t just about one country” and threatened to expand sanctions if the crisis intensified.
Regional Contagion
Currencies from Turkey’s lira to Hungary’s forint dropped more than 1 percent against the dollar and euro in the first three weeks of March, while the WIG30 index of equities in Warsaw and the BUX Index in Budapest slumped more than 3.7 percent. Poland and Hungary share borders with Ukraine, while Turkey is situated across the Black Sea and counts Russia as its second-biggest trading partner.
“The appetite of investors, both domestic and external, to allocate capital when there’s so much uncertainty has dropped,” Dmitri Petrov, a London-based Russia strategist at Nomura Holdings Inc., said by phone March 21. “On the other hand, sanctions have been very mild, and focused on a close circle of Putin.”