Turkey and Argentina bonds make surprising comeback - Bloomberg

After being the world’s worst performers in August, notes from Turkey and Argentina are leading global gains in September, despite presence of concerns about details of the plans, Bloomberg said.

Turkish bonds have returned 10 percent this month, with another troubled economy of Argentina following with a 9.9 percent gain. Turkey led emerging corporate bonds, as banks Yapi Kredi and Isbank posted 20 and 19 percent returns respectively, Bloomberg said, trouncing the 0.8 percent index average. The return of investors to Turkey and Argentina - among the worst performing bonds only a month ago -  comes as the administrators of both nations take steps to contain the crises.

It is evident that policy makers have taken concrete steps to right what’s wrong with their troubled economies in both nations, the article noted, highlighting that Argentina is working with the International Monetary Fund (IMF) to repair its finances while Turkey has pledged support for its banks.

Despite the fact that both countries are still burdened by massive current-account and fiscal deficits, Bloomberg said,  ‘’the swing in sentiment highlights how much investors are willing to forgive when confronted with fat yields -- Argentine bonds pay 6.2 percentage points more than Treasuries and Turkey offers a 4.4-point spread.’’

“People are taking time to fundamentally go through the stories and making up their mind about whether they give credibility to the stories that the Turkish government and central bank or Argentine government and central bank give the investor community,” Bloomberg quoted Josephine Shea, a portfolio manager at Standish Mellon Asset Management in Boston, as saying.

Despited the renewed risk appetite, however, Turkey or Argentina are from a resolution, Bloomberg said.