* Emerging stocks jump 1.3 pct to 14-day high
* Zloty hits 13-month high, sovereign debt spreads tighten
* Nakheel 2011 bond falls, focus on Dubai World debt deal
By Carolyn Cohn
LONDON, Feb 22 (Reuters) - Emerging stocks jumped more than
one percent and the zloty hit a 13-month high on Monday as
investors speculated about a bail-out for Greece, but concern
about Dubai World's restructuring hit Nakheel debt prices.
Stocks got a boost after a report, later denied by the EU,
that Germany's finance ministry has prepared a bail-out plan for
Greece under which countries using the euro would provide aid
worth between 20-25 billion euros.
The risk of a sovereign default in the euro zone and of
monetary tightening in emerging countries such as China has
dampened demand for high-yielding assets this year, but they
have started to show some resilience.
"We're seeing a continued recovery of emerging markets from
last week," said Simon Quijano-Evans, head of EEMEA economics at
Cheuvreux in Vienna.
"Emerging markets are well prepared for any more moves we'll
see from central banks to tighten liquidity."
Benchmark emerging equities <.MSCIEF> jumped 1.35 percent to
2-1/2 week highs and emerging sovereign debt spreads <11EMJ>
tightened by 4 basis points to 289 bps over U.S. Treasuries,
around their narrowest levels in a month.
The Polish zloty hit a 13-month high against the euro
<EURPLN=>, with Poland seen as one of the strongest emerging
European markets.
The Hungarian forint hit a 10-day high against the euro
<EURHUF=> ahead of an expected 25 bps rate cut to 5.75 percent.
[].
DUBAI WORLD
However, Dubai World subsidiary Nakheel's 2011
dollar-denominated Islamic bond fell 2.5 points <XS0335122106=R>
after a source told Reuters that Nakheel's May 2010
dirham-denominated Islamic bond was unlikely to be repaid.
[]
Dubai will present an "equitable" plan to Dubai World
creditors next month that does not give preferential treatment
to the government but banks are unlikely to warm to the
proposal, a source familiar with the matter said.
[]
Ukraine's five-year credit default swaps fell and global
bonds rallied after Prime Minister Yulia Tymoshenko dropped her
legal case challenging the presidential election.
The about-turn leaves the way clear for election winner
Viktor Yanukovich to be inaugurated as president on Feb 25.
"The political situation is still open but the most
important thing for investors is that there will be a president
inaugurated this week," said Quijano-Evans.
Ukraine's five-year credit default swaps dropped to 940
basis points from 976 bps at Friday's close, according to Markit
data.
Turkish five-year credit default swaps also fell, to 189 bps
from 193, after ratings agency Standard & Poor's upped Turkey's
rating last week, to BB.
"Turkish CDS levels suggest that markets still see a lower
risk premium for Turkish assets than that implied by ratings,"
said analysts at Unicredit in a client note.
(Additional reporting by Sebastian Tong; editing by Stephen
Nisbet)
