Bonds
Morgan Stanley Says Best of El Salvador Bond Rally Is Over
- Bonds have returned 20% since May ‘like’ stance on debt
- Fiscal adjustment will probably be smaller than budget shows
This article is for subscribers only.
Morgan Stanley has turned neutral on El Salvador debt, arguing that there’s little room for gains after a 20% rally in recent months.
Simon Waever, the global head of emerging-market sovereign credit strategy, removed the bank’s “like” call on the Central American nation’s debt, according to a note published Monday. Some of the bonds are hovering around par for the first time in years, reflecting optimism over the government’s budget belt-tightening and the likelihood of a deal with the International Monetary Fund.