Plunging stock markets and volatile currencies in January and early February reflected growing fears of a global slowdown, if not outright recession, according to many analysts and investors. Country risk analysts apparently didn’t get the memo. The average rating in Institutional Investor’s latest semiannual Country Credit survey increases by 0.6 point from September, to 44.7 on a scale of zero to 100.
Amid broad advances, ratings rise most notably for countries at the center of Europe’s debt crisis, including Ireland (up 3.4 points), Italy (+1.3) and Spain (+1.0). Greece, which struck a third debt restructuring agreement in August, climbs 5.6 points and vaults 19 places, to 126th, but that leaves it sandwiched between Libya and Pakistan.
Emerging-markets countries in Africa, Central and Eastern Europe and Latin America also post broad gains even though many have seen the prices of their commodities exports decline. Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott, says spreads on many emerging-markets bonds had widened so much that they created an opportunity. “Bond prices have improved,” he says.