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Emerging market CDS volume drops 19 percent in fourth quarter -EMTA
March 2, 2017 / 4:04 PM / 9 months ago

Emerging market CDS volume drops 19 percent in fourth quarter -EMTA

NEW YORK, March 2 (Reuters) - Trading volume for emerging market credit default swaps fell 19 percent in the fourth quarter from the previous period, dropping to $306 billion, according to a survey of 13 major dealers released on Thursday.

EMTA, the emerging markets debt trading and investment industry trade association, said volume sank in the fourth quarter of 2016 from the third, when it was $376 billion, but was still significantly higher than the $254 billion reported in the fourth quarter of 2015.

The largest CDS volumes in the survey were those on Mexico, at $36 billion. EMTA Survey participants also reported $35 billion in Brazilian CDS; Turkish volumes followed at $31 billion.

EMTA’s survey also included volumes on nine corporate CDS contracts, with the highest reported quarterly volume on Venezuela’s state-owned oil company PDVSA, at $2 billion.

Investors buy CDS as a way to insure the debt they own against a default or restructuring.

EMTA collected data from 13 large international banks and broker-dealers on emerging market CDS contracts. Participants were asked to report their CDS volumes on 21 emerging markets countries and nine emerging market corporate issuers. (Reporting by Dion Rabouin; Editing by Dan Grebler and Alistair Bell)

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