Investors digest ECB news; South Korean leader impeached; Turkey eyed; Bahrain downgraded

By Christine Van Dusen

Atlanta, Dec. 9 – South Korea stepped into the spotlight on a Friday that saw emerging markets investors digesting the news that the European Central Bank will slow but extend quantitative easing.

Meanwhile, South Korea’s parliament voted to impeach President Park Guen-hye. Prime Minister Hwang Kyo-ahn will take over while a court decides if the impeachment can be made permanent. That ruling could take up to six months to complete.

This comes as South Korea faces a contracting bond market, with high yields stemming from the uncertainty created by Donald Trump’s presidential win. In response, the sovereign’s financial regulatory commission is looking to restart its bond stabilization fund.

Looking to Turkey, the government is planning some measures to support the economy, according to a report from Schildershoven Finance BV.

Restarting the bond stabilization fund is meant primarily to “strengthen the non-financial sector’s access to credit,” Schildershoven said.

In other news on Friday, Bahrain’s rating was cut to BB- from BB by S&P, with a stable outlook.

Among Middle Eastern names, Bahrain is, of late, “one of the weaker links in the Gulf region,” a London-based trader said.

Still, the sovereign’s 2018, 2020 and 2021 notes trade well, he said, and feel solid.

© 2015 Prospect News.
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