“Last year, bond yields were up worldwide last year before the pandemic, while bond yields started reduction from summer”, - Ana Nachkebia, chief analyst of Galt&Taggart told Business Morning.
As Nachkebia explained, 2021 started quite well for developing countries, but there have been some interesting shifts since February and March.
"Expectations on economic recovery in the US have improved significantly, it means that investors' visions for the US economy have improved. Leading investors moved from risk-free assets to risky assets and sold treasury bonds.
Yields began to grow form February and the process continued in March; the benchmark stood at 1.73% on 10-year Treasury bonds in late March. This means that expectations for economic recovery are improved, but on the other hand it will get funding expensive for many countries.
To mitigate these negative effects, the European Central Bank increased its bond-buying pace in March to keep yields low.
Despite this growth, the yield on our region’s bonds remains low. The newly issued bonds by Armenia are traded at about 4%, which allows us to think that newly placed Georgian bonds will have a good refining rate as well.
