Tuesday, September 26, 2023

Dominican Bonds Attract Wall Street Investors

The economic recovery of the Dominican Republic compared to its peers in the region has made it more attractive as an investment destination, being recognized by weight companies in the Wall Street market such as JP Morgan Chase & Co., Banco Bilbao Vizcaya Argenta and Banco Santander.

This was highlighted by the Ministry of Finance in a statement, which maintained that Dominican sovereign debt instruments, according to a report by the Bloomberg agency, are becoming the “favorites” of these investors in the financial center of the city of New York, as other Latin American debt instruments begin to fade.

“Credits such as those from the Dominican Republic offer stability and resilience in the face of the uncertainty of broader external markets,” said Siobhan Morden, general director of fixed income strategy for Latin America at Santander, quoted by the agency, who recommends the bonds sovereigns in dollars of the country.

For the head of the Treasury, Jochi Vicente, the report reiterates the confidence shown by foreign investors in the national economy, which is constantly growing.

“This report recommends investing in our country, given that we are surpassing our peers, as the first option in Latin America (to invest) and more confidence in the debt in local currency,” Vicente highlighted on his Twitter account.

Strategists at JP Morgan reported that local currency debt offers a good opportunity to take advantage of the Dominican peso, which has strengthened 2% in the last month, the best performance among Latin American currencies behind Mexico.

“Investment should continue to be an important driver of growth, supported by relatively stable and business-friendly policies,” strategists Gisela Brant and Steven Palacio wrote in a note, adding that they prefer shorter-term peso bonds, as according to Bloomberg.

Meanwhile, Katrina Butt, senior economist at AllianceBerstein, said that despite its reputation for relying on tourism, the country is more diversified than other Caribbean nations.
The economy is expected to grow 4.5% this year, compared with an average expansion of 1.7% in the region, according to the International Monetary Fund, the report points out.

Earlier in the year, the government issued US$700 million in dollar-denominated bonds maturing in 2031 and US$1.1 billion in peso-denominated bonds maturing in 2033.

These instruments presented a high demand by investors of four times the announced amount of the bond in pesos and 10 times the amount denominated in dollars.


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