* Forint tests 6-week low, Greece, Austria news weighs
* Czech crown, Polish zloty hit two-week lows
* Senegal issues $200 mln bond, Seychelles to exchange bond
By Carolyn Cohn
LONDON, Dec 15 (Reuters) - Hungary's forint tested a
six-week trough, while the Czech crown and Polish zloty hit
two-week lows against the euro on Tuesday, as news out of Greece
and Austria unnerved investors in eastern European markets.
A ratings downgrade of Greece last week, following a
restructuring announcement by goverment-owned Dubai World, has
increased wariness about sovereign risk.
The issue of western European bank lending in eastern Europe
also came back into play, on a report Austria's central bank and
its financial market regulator have put Oesterreichische
Volksbanken <OTVVp.VI>, the country's top cooperative bank, on a
watchlist. [] However, the bank said the report was
inaccurate. []
"People are looking at the various fiscal positions in some
of these countries, and there is an element of unease coming
in," said Zsolt Papp, chief economist, emerging Europe, at KBC.
"The whole willingness and ability of the EU to pay out for
member states is being questioned."
Benchmark emerging equities <.MSCIEF> fell 0.33 percent to
975.97.
The forint dropped 0.6 percent <EURHUF=>, testing six-week
lows, the Czech crown fell 0.8 percent <EURCZK=> and the Polish
zloty fell 0.4 percent <EURPLN=>.
"Tail-risks for emerging Europe remain and suggest that the
region will continue to underperform during the recovery," said
analysts at RBS in a client note.
The Romanian leu steadied <EURRON=>, however. Romania may
get a 1.5 billion euro IMF loan tranche in January, finance
minister President Traian Basescu said on Tuesday.
[]
Following a $10 billion bail-out of Dubai by Abu Dhabi,
Dubai World subsidiary Nakheel said repayment of its $4.1
billion sukuk had reached clearing systems. But investors are
still eyeing restructuring plans for a further Dubai World debt
pile of more than $20 billion.
"The Dubai saga has seriously damaged investor perceptions
of the region," RBS analysts said.
"Investors will need to do more homework to determine
stand-alone credit quality and implicit guarantees should not be
taken for granted."
The cost of insuring Dubai's debt against restructuring or
default was steady in the five-year credit default swaps market,
at 430.9 basis points mid-price, according to CDS monitor CMA
DataVision.
Emerging sovereign debt spreads overall edged in by 1 bp to
295 bps over U.S. Treasuries <11EMJ>, and remain close to their
tightest levels in two months.
Senegal has set the yield on a $200 million five-year bond
at 9.25 percent, a banking source said.
Pricing is due later today for the bond, the first in two
years from a sub-Saharan African country outside South Africa.
Meanwhile, Seychelles said on Tuesday it launched an
exchange offer for a defaulted $230 million Eurobond.
[]
(Additional reporting by Sebastian Tong; Editing by Victoria
Main)
