JPMorgan backs Sri Lanka bonds on bets that crippling crisis to ease

REUTERS: U.S. investment bank JPMorgan backed Sri Lanka’s crisis-hit government bonds yesterday, saying recent political changes in the country should gradually improve its strains and help its talks with the International Monetary Fund (IMF).

Adding an ‘overweight’ - effectively a buy recommendation - JPMorgan analysts said that “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 yesterday.

“We think this stability should result in both the IMF discussions and the process of appointing legal and financial advisors moving forward,” JPMorgan added.