They are starting to feast their eyes once more on Belarus, which less than a year ago looked close to default, while Ukraine, a favourite of 2010, is again going out of fashion.
The export-oriented economy of Belarus has let its currency float as a condition of IMF funding, and money from the IMF and Russia has fended off payment difficulties.
Over in Ukraine, the central bank has not allowed its currency to weaken much and the country is having one of its regular spats with Russia over the price and volume of gas supplies. Ukraine is also in dispute with the IMF, and funds from the international lender have been suspended for nearly a year.
Maxim Raskosnov, analyst at VTB Capital, told emerging debt investors at an EMTA forum in London this week:
Twelve months ago, everyone was loving Ukraine and starting to dislike Belarus. This time around, Belarus has gone through 66 percent devaluation, and is now much more prepared to deal with economic challenges, whereas in Ukraine, nothing has been repaired. Ukrainian corporates comparable to Russian and Kazakh ones are suffering because they are located in Ukraine.
Ukraine’s five-year credit default swaps are quoted at around 835 basis points — okay, it’s lower than Greece or Portugal but twice as high as Italy — and the yield on its 2017 bond hit two-year highs this month.
Meanwhile, the yield on Belarus’ debut Eurobond, maturing 2018 and launched only a year ago, is at its lowest since August, and the state’s Belarusbank said this week it was planning to revive Eurobond plans this year.
