GiveMeLeverage
& I will remove the world
Venezuela's benchmark dollar bond due 2027 rose 3.5 points in early U.S. trade to its highest since May 2010 on speculation of a change of leadership in Venezuela, which could prove more investor-friendly. Venezuela's flamboyant socialist leader Hugo Chavez said late on Thursday he had surgery to remove a cancerous tumor, presenting a serious challenge to his near-total dominance of the South American OPEC nation since 1999. "President Chavez's health scare could be interpreted a number of ways, but from a market perspective risk premiums should decline," said Richard Segal, emerging markets analyst at Jefferies. "Political vacuums are rarely to be encouraged, but this one could lead to a slowdown in public spending and could raise the likelihood of an opposition victory in the next elections, and thus a less confrontational governing style." The bond rose to 78.00, according to Reuters data, giving a yield of 12.4 percent. Venezuela's debt insurance costs, among the highest in the world, fell 10 basis points in the five-year credit default swaps market, to 990 bps, according to Markit. The five-year CDS have fallen 100 bps in the last week on speculation over Chavez' health.
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