The following chart from Bespoke Investments exhibits the order of default risk among nations as determined by the cost of insuring the local sovereign debts via the Credit Default Swap (CDS).
According to Bespoke Investments ``These prices represent the cost per year to insure $10,000 of debt for five years. We also show what the prices were at the start of the year. Of the G-8 countries, Russia has by far the highest default risk with a CDS price of $523. That's higher than any of the struggling banks we highlighted yesterday. Japan, France, the US, and Germany have the lowest default risk of the group of countries, but they have all spiked more than 200% this year. Argentina is in the most trouble, with a cost of $4,453 per year to insure just $10,000 of debt. Venezuela is the second worst at $2,016, followed by Lebanon, Egypt and Indonesia." (highlight mine)
The Philippines is ranked 12th and is about 200 basis points away from Indonesia. However, looking at the start of the year figures, the Philippines rose by only 265 basis points compared to Indonesia's 485, while Malaysia and Thailand saw significant increases too but at less the pace than ours at 185 and 165 basis points, respectively. Although if seen from the perspective of % change from the start of the year, the Philippines would account for the least.
Yet we can't deny that by being the 12th, this means the CDS markets believe we are one of the more vulnerable countries in the heightened risk aversion landscape.
According to Bespoke Investments ``These prices represent the cost per year to insure $10,000 of debt for five years. We also show what the prices were at the start of the year. Of the G-8 countries, Russia has by far the highest default risk with a CDS price of $523. That's higher than any of the struggling banks we highlighted yesterday. Japan, France, the US, and Germany have the lowest default risk of the group of countries, but they have all spiked more than 200% this year. Argentina is in the most trouble, with a cost of $4,453 per year to insure just $10,000 of debt. Venezuela is the second worst at $2,016, followed by Lebanon, Egypt and Indonesia." (highlight mine)The Philippines is ranked 12th and is about 200 basis points away from Indonesia. However, looking at the start of the year figures, the Philippines rose by only 265 basis points compared to Indonesia's 485, while Malaysia and Thailand saw significant increases too but at less the pace than ours at 185 and 165 basis points, respectively. Although if seen from the perspective of % change from the start of the year, the Philippines would account for the least.
Yet we can't deny that by being the 12th, this means the CDS markets believe we are one of the more vulnerable countries in the heightened risk aversion landscape.
No comments:
Post a Comment