NEWS ANALYSIS: Defaults don’t spoil traders’ appetite for Mozambican assets
For a country that has missed several debt payments in 2017, Mozambique’s assets are performing remarkably well. The Southern African nation’s currency has posted the world’s biggest gain in 2017, while the price of its overseas bonds, which the government defaulted on in January, has soared about 30%, making them among the best-performing sovereign notes in emerging markets. The rally — after the rout in 2016 — suggests investors may be starting to look beyond Mozambique’s debt crisis, which was triggered by excessive, sometimes illegal, borrowing and plummeting commodity prices. While policy makers have yet to start restructuring talks, investors have been encouraged by two things: the completion of an independent audit into Mozambique’s foreign debts and a $7bn project signed off by an Eni SpA-led consortium to exploit one of the biggest natural gas discoveries in a generation. Interest rates that almost tripled since the start of 2016 have also helped lure yield hunters. "The cu...
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