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Draghi’s bond sweep boosts emerging markets issues

The European Central Bank’s plan to buy corporate credit is having a positive knock-on effect on emerging market bonds – even though the ECB has yet to spend its first euro.

Issues from Bulgaria, Israel and South Africa are among those to benefit from the ECB plan
Issues from Bulgaria, Israel and South Africa are among those to benefit from the ECB plan

The European Central Bank’s plan to buy corporate credit is having a positive knock-on effect on emerging market bonds – even though the ECB has yet to spend its first euro.

Bankers reckon that the plan unveiled by ECB president Mario Draghi will pull yields on investment-grade corporate bonds even lower - making investors seek out emerging markets issues as one of the few ways of getting meaningful yield.

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