NewsWhore
09-06-2007, 05:50 PM
In their Central America and Caribbean Monthly Report issued today, Bear Stearns reports that strong growth continues in the DR, driven by the financial services, communications and commerce sectors, and by a healthy upsurge in total exports. The DR's GDP expanded by 7.9% in the first half of the year, and is projected to expand by 6% this year. Bear Stearns forecasts that "given its positive momentum, however, we expect it to grow between 7.5%-8.5%, instead." The brokerage firm rates the DR with B2/B+ and "marketperform".
The brokerage firm mentions that inflation is well contained, coming in at 0.3% in July, the lowest monthly level since October 2006. Nevertheless, Franco Uccelli, analyst for the firm, believes it will be difficult for the country to meet the 4%-6% inflation forecast for 2007 as a whole. "However, we also believe that DR's tight monetary controls will likely keep any deviations from the target relatively small (1% or less)".
The country's external liquidity continues to improve, Bear Stearns points out. "Strong growth in DR's net international reserves, which have escalated by 31% to reach US$2.4 billion so far this year, has noticeably improved its external liquidity position."
Nevertheless, the brokerage firm points out that despite the recent favorable economic results, its external bonds have failed to outperform. "We attribute this to the market perception that the DR has finally left its troubles behind and has graduated to a more mainstream status (by regional standards), becoming one more stable credit that performs well from a fundamental perspective, yet, like its peers, fails to generate greater market interest in its bonds. A caveat to this conclusion, however, is that its bonds continue to afford a premium over those of its closest comps, making them a likely target of yield-hungry investors during relatively peaceful times."
More... (http://www.dr1.com/index.html#7)
The brokerage firm mentions that inflation is well contained, coming in at 0.3% in July, the lowest monthly level since October 2006. Nevertheless, Franco Uccelli, analyst for the firm, believes it will be difficult for the country to meet the 4%-6% inflation forecast for 2007 as a whole. "However, we also believe that DR's tight monetary controls will likely keep any deviations from the target relatively small (1% or less)".
The country's external liquidity continues to improve, Bear Stearns points out. "Strong growth in DR's net international reserves, which have escalated by 31% to reach US$2.4 billion so far this year, has noticeably improved its external liquidity position."
Nevertheless, the brokerage firm points out that despite the recent favorable economic results, its external bonds have failed to outperform. "We attribute this to the market perception that the DR has finally left its troubles behind and has graduated to a more mainstream status (by regional standards), becoming one more stable credit that performs well from a fundamental perspective, yet, like its peers, fails to generate greater market interest in its bonds. A caveat to this conclusion, however, is that its bonds continue to afford a premium over those of its closest comps, making them a likely target of yield-hungry investors during relatively peaceful times."
More... (http://www.dr1.com/index.html#7)