J.P. Morgan Emerging Markets Bond Index Plus gained 3.52% in June, New Emerging Local Markets Index up 0.75%

Business Wire, July 3, 1996

NEW YORK--(BUSINESS WIRE)--July 3, 1996--The J.P. Morgan Emerging Markets Bond Index (EMBI ) rose 3.52% in June, increasing its year-to-date gain to 15.47%. "The favorable performance was driven by Yeltsin's strong showing in the first round of the Russian presidential election, market anticipation of debt buybacks in emerging market countries, and uncertainty on the likelihood of a Fed rate hike in July," according to Jose Luis Daza, head of emerging markets research at J.P. Morgan.

In addition to posting the month's largest gain ( 13.05%), Russia overtook Panama as 1996's best performer to date. Panama was the only EMBI country to post a loss during the month (-0.07%), as administrative delays in the issuance of its Brady bonds and political noise prompted profit taking.

Morgan's new Emerging Markets Local Index, which tracks total returns for local-currency-denominated money market instruments, rose 0.75% in June. All ten emerging markets countries in the index posted gains during the month. Year-to-date, the ELMI is up 8.59%.

Optimism in the local bond markets strengthened the rand which helped South Africa ( 2.04%) edge out Turkey ( 1.98%) as the month's best performer. Turkey had been the strongest performer for most of June; weakening in the closing days of the month despite the formation of a new government. Mexico ( 0.05%) lagged the other ELMI countries primarily due to profit taking following May's peso rally, and a technical correction in interest rates triggered by concerns over U.S. interest rates and political noise.

On a year-to-date basis, Mexico remains the best ELMI performer ( 23.62), followed by Turkey ( 19.33%). South Africa is the only ELMI country with a current year-to-date loss (-9.42%).

The Emerging Markets Bond Index Plus tracks total returns for traded external debt instruments, including Brady bonds, loans, and Eurobonds, as well as U.S. dollar local market instruments in the emerging markets. Information about the EMBI and the ELMI is also available on the Internet (http://www.jpmorgan.com). -0-