Wall Street supports JR Mullin’s candidacy

Panamanian government bonds emerged as emerging markets took the lead, a positive boost attributed to one of several polls that found José Raúl Mulino, a former security minister and ally of ex-President Ricardo Martinelli, taking the lead in the presidential race. next May.

The report, published by Bloomberg, points out that this change in political dynamics has contributed to a more optimistic perception by investors, despite concerns about a possible downgrade of the country’s investment grade by rating agencies.

“Bonds rose across the board on Tuesday, led by longer-dated bonds. The rise came after a poll published by La Prensa showed former security minister José Raúl Mulino taking the lead in the Podemos presidential election. The emergence of Mulino, an ally of the former president Ricardo Martinelli, the leader in the race, has helped investors become less negative about the country, even as it teeters on the point of being downgraded by rating companies,” the digital media emphasized.

Dollar bonds rose nearly 100 basis points during that period, according to JPMorgan Chase & Co. data.

The selloff left bond values ​​at levels that prompted JPMorgan to change its recommendation to overweight, according to strategists Gorka Lalaguna and Ben Ramsey.

“Given the size of the expansion, the story of the fallen angel and the recent postponement of estimates rather than pricing. “I think the bar for further bad credit is high,” the strategists wrote in a note. They expect the country to lose its investment grade in the next 12 months.

S&P Global Ratings changed its outlook for Panama to negative from stable in November, with a rating of BBB, two levels above junk.

Both Moody’s Ratings and Fitch Ratings rate the credit one level above junk bonds, with Fitch assigning a negative outlook.