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Bond Market News
Aviva Cautions Against Sri Lanka, Pakistan Dollar Bonds
April 7, 2025
Asset management company Aviva Investors said that dollar bonds of Pakistan and Sri Lanka may sell-off on US tariffs, particularly if investors believe that it would result in a materially wider current account deficit, putting both countries’ economic recoveries in jeopardy. One of their analysts noted that the nations’ authorities may highlight to investors if they plan to negotiate, or if there are options to increase trade with other nations to support sentiment. For Sri Lanka, the tariffs are a concern given that the share of US exports-to-GDP is at around 5%, the analyst noted. Sri Lanka only recently completed a restructuring and may need to rebuild buffers, she added. Aviva further noted that Asia was a clear loser, while LatAm and frontier EM would come out comparatively well.
Both, Sri Lanka and Pakistan’s dollar bonds were trading about 1 point lower.
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