(Reuters) – U.S. investment bank JPMorgan backed Sri Lanka’s crisis-hit government bonds on Wednesday, saying recent political changes in the country should gradually improve its strains and help its talks with the International Monetary Fund.
Adding an ‘overweight’ – effectively a buy recommendation – JPMorgan analysts said: “political stability should pave the way for bonds to move higher from near all-time lows”.
Sri Lanka is officially now in default as a so-called “grace period” to make some already-overdue bond interest payments expired on Wednesday.
“We think this stability should result in both IMF discussions and the process of appointing legal and financial advisors moving forward,” JPMorgan added.