Emerging Debt-Turkey underperforms in soft market

The wider emerging debt market drooped 0.27 percent in a bout of profit taking after a 5.8 percent year-to-date rally.
The parliamentary approval fell short of the help Turkey had been asked to give the United States in its campaign to topple Iraqi President Saddam Hussein.
"Turkey is not viable without significant financial assistance … You don’t get money for air space," said Mike Conelius, manager of the T. Rowe Price Emerging Markets Fund.
Turkish-U.S. ties had already been strained by the failure of an earlier plan to send 62,000 U.S. troops into northern Iraq through Turkey. The United States made it clear that with the collapse of the first plan Turkey had forfeited a $6 billion U.S. grant to help shield it against war-related economic damage.
Wall Street sees the financial aid as necessary if Turkey is to shoulder its huge debt load while binding up fiscal accounts battered by the drop in the nation’s tourism sector.
"There is still a chance that they may back into some support," Conelius said, "But by failing to support the United States to the extent that they had promised, they may have signed their own fiscal death warrant."

WIDER MARKET STUMBLES
Brazil C bonds <BRAZILC=RR>, a benchmark for the emerging debt market, fell 3/8 to bid 76-3/4.
"From a relative value perspective, emerging markets are not as appealing now as they were a couple of months ago," said Denis Parisien, an analyst with the Miami branch of Standard New York Securities.
He noted that it remains to be seen if the war will be completed as quickly and cleanly as some investors are projecting.
"There’s still quite a bit of uncertainty and the fact that emerging markets had such a long, strong rally leaves it vulnerable to profit taking," Parisien added. "We recommend relatively defensive positions for now."