Stocks, the dollar, bitcoin – everything is rising on the back of Trump’s election victory. This also applies to Ukrainian dollar bonds
6 November 12:53
Funds are actively buying Ukrainian dollar-denominated bonds, believing that Donald Trump’s victory in the US election could help end the war with Russia sooner. One of the most successful hedge funds in emerging markets, Sandglass Capital Advisors, predicts a significant increase in the value of Ukrainian assets, especially government bonds and GDP warrants, in the event of a cessation of hostilities. Bloomberg writes about this, Komersant ukrainskyi reports.
Experts believe that Trump’s presidency could speed up peace talks on Ukraine. And Donald Trump does not disappoint them. The night after the election, speaking to his supporters, he said: “I’m not going to start a war, I’m going to stop wars.”
Funds are buying Ukrainian bonds in the hope that a Trump presidency will help bring about peace more quickly, explains Dmytro Bozhko of Dragon Capital in Kyiv. “This idea is widespread in the market,” Bozhko says, as quoted by Mind.
And, as Bloomberg states, Ukrainian bonds have risen by almost 6% in recent weeks, becoming one of the best performing assets on the market, with their value approaching 50 cents to the dollar.
Gena Lozovsky, CIO and co-founder of Sandglass Capital Advisors, also points to this dynamic. According to him, as quoted by Mind, the distressed debt market is showing strong dynamics, and Ukraine is among the most promising areas for investment along with Argentina and Sri Lanka.
According to Bloomberg, the yield on dollar-denominated debt obligations of low-rated emerging market countries exceeded 13% this year, with distressed assets, including Ukraine’s bonds, showing the best performance.
What’s happening in the world
Bloomberg, amid news of Donald Trump’s victory in the US presidential election , states that stocks, the dollar, Treasury yields, and bitcoin are all on the rise.
For example, US stocks rose, S&P futures rose by 1.4%; the dollar showed the largest increase against major currencies since 2020; Treasury bonds fell, resulting in a rise of more than 0.1 percentage point in the benchmark yield; and bitcoin soared to a record high.
These movements, according to the publication’s experts, make it clear that investors expect the second Trump administration to be very similar to the first: a constant stream of policies (tax cuts, deregulation, tariffs) that will simultaneously stimulate economic growth, corporate profits, and inflation.
But there is also a warning signal in such investor actions
Despite the fact that investors are generally positive, there is a stark warning in the market fluctuations.
The sharp rise in Treasury yields underscores fears that Trump’s policies will only lead to a further increase in the bloated budget deficit and a resumption of the inflationary spiral that policymakers have only just begun to suppress after the pandemic. In Wall Street parlance, this could mean that vigilant bond advocates are putting pressure on leaders in Washington to keep spending under control.
