Friday, May 19, 2017

Dominican Republic: April index of Constructions Prices

The index of Construction Prices in the Dominican Republic for the month of April 2017 has just been released: the 138.06 value of the index is up 3% from April last year and it is running at an average annual rate of 1.58% recovering from the slowdown experienced over 2014 and 2015.

The Dominican CPI for April 2017 rose at a similar price (3.5% year on year):

Wednesday, May 3, 2017

Dominican Republic new USD bond maturing in 2027 with 5.95% coupon

Dominican Republic issued on January 18, 2017 a new US dollar-denominated 10-year bond (Reg S issue), bookrunner of the new issue was JP Morgan and local bank BanReservas was co-manager on the offering, with Bank NY Mellon as Trustee and Paying Agent. 

Initial settlement: 01/25/2017
Maturity: 01/25/2027
Coupon: 5.95%
Size: 1.2 USD bn
Rating: B+

See more:

Dominican Republic Jan 2017 USD Bond prices

This bond was issue at par and it is now trading at around  105.01 as of writing this yielding approximately 5.28%), it has been benefiting from global high yield demand: the iShares JPMorgan USD emerging market bond ETF (whose average duration is almost the same of this DR bond)  has rallied 5 big figures as well over the same period.

JP Morgan Emerging Markets Bonds ETF  and USD 10year Notes yield

The Dominican republic Sovereign spread is trading at the lowest level of the last 10 years around 300 basis points over Tresuries and at these levels any risk aversion episode could heavily weigh on the spread. 

The Dominican Republic has a 2.75% weight on the Jp Morgan Emerging Bond Market Index EMBI and the ETF tracking this index (trading symbol EMB) owns 300 mios uSd worth of Dominica Republic USD denominated sovereign debt, the exact issues owned by EMB are:

Click on the table to enlarge

Tuesday, May 2, 2017

Dominican Republic Current Account Update

In the first quarter of 2017 solid growth of airport arrivals and external remittances provide the Dominican Republic with an encouraging start of the year as far as hard currency inflows are concerned. For an import dependent country like the Dominican Republic monitoring tourism growth and external remittances is important for Current Account dynamics.
Structural CA deficits have been financed oer the years with Capital and Financial Account surpluses, strong FDI investments and favorable external conditions (ZIRP and NIRP policies in the core countries) have improved the USD reserves balance yet growing external debt must be monitored.
We will keep track of remittances and airport arrivals as good coincident indicators for the current account developments this year and we will post here periodic updates on this issue. 

 Strong Growth of total airport arrival: first quarter of the last four years chart

As of March 2017 total airport arrivals are up a solid 4% versus 2016

Total yearly airport arrivals 2004-2016

Dominican Republic: Remittances per month of the year

Dominican Republic:  Cumulative remittances  up a solid 6.3% as of February 2017