London (Reuters) – On Wednesday, the U.S. investment bank JPMorgan (NYSE: JPM) backed Sri Lanka’s government bonds, which have been hit by a financial crisis. The bank said that recent political changes in Sri Lanka should help the country’s problems get better over time and help it talk with the International Monetary Fund.
Analysts at JPMorgan said, “Political stability should pave the way for bonds to move up from near all-time lows,” which is the same thing as saying “buy.”
Sri Lanka is now officially in default because a so-called “grace period” to make some already-late bond interest payments ended on Wednesday.
“We think that this stability should lead to both IMF talks and the process of choosing legal and financial advisors,” JPMorgan said.