J.P. Morgan Emerging Markets Bond Index Plus falls 0.40%% in August, Emerging Local Markets Index down 3.53%.

NEW YORK--(BUSINESS WIRE)--Sept. 3, 1997--The J.P. Morgan Emerging Markets Bond Index Plus (EMBI+) declined 0.40% in August - its first monthly loss since March - reducing its year-to-date return to 14.38%. The Treasury market sell-off and weak global equity markets initially did not have a profound effect on the emerging debt markets, as the EMBI tightened to a record low of 355 bps on August 14. By month-end, however, significant market corrections in emerging Asia and Latin America resulted in a widening of EMBI spreads.

Russia rallied 3.46% during August (+12.50% year-to-date) on positive debt reconciliation news. The Ministry of Finance indicated that it now expects to close the deal before the end of the year as 78% of Vnesh loans were reconciled as of the end of August. Bulgaria continued to be the best performing EMBI+ market on a year-to-date basis, (+55.22%); its seventh consecutive month on top.

Poland was the worst performer in the EMBI+ falling 2.22% during August (+4.25% year-to-date). Asset values were adversely affected by a weaker zloty and concerns about upcoming elections and the budget deficit.

The Emerging Local Markets Index (ELMI) fell 3.53% in August, resulting in a year-to-date loss of 3.05%. This loss was attributable to currency devaluations stemming from changes in Asian foreign exchange regimes. The Czech Republic was the best performer in August (+3.51%), reflecting positive economic news. The Czech government eliminated its controversial import deposit regulations; these measures, intended to reduce the trade gap, were unsuccessful.

Indonesia, this month's worst performer, dropped 13.14% in August (-15.91% year-to-date), as the government eliminated the foreign exchange bands and the rupiah weakened. Thailand, fell 7.74% in August on concerns that the IMF-sponsored package would not fully address the problems in the country's financial sector . Year-to-date, Thailand is the worst performing ELMI country, (-17.56%).

The Emerging Markets Bond Index Plus tracks total returns for traded external debt instruments in the emerging markets. The Emerging Local Markets Index tracks total returns for local-denominated money-market instruments. Information about the EMBI+ and the ELMI is also available on the Internet (http://www.jpmorgan.com). -0-

U.S. dollar total return performance (%)
August 29, 1997


                 EMBI+                   ELMI
                 Aug     YTD    12 mos   Aug    YTD  12 mos
Composite       -0.40   14.38   29.92  -3.53   -3.05  -0.59

Country composites
Argentina       -0.43   16.03   33.39   0.37    3.26   4.95
Brazil          -1.15   14.40   25.67    -      -       -
Bulgaria        -0.65   55.22   83.14    -      -       -
Czech Republic     -      -      -      3.51  -11.49  -11.57
Ecuador         -1.79   19.50   55.87    -      -       -
Indonesia          -      -      -    -13.14  -15.91  -12.56
Malaysia           -      -      -     -9.11   -9.48   -8.45
Mexico          -1.54   13.35   22.24   2.00   17.10   22.35
Morocco         -0.33   16.43   32.57    -      -       -
Nigeria          0.34    9.71   39.41    -      -       -
Panama          -0.40   15.35   36.33    -      -       -
Peru            -0.43   16.92   36.30    -      -       -
The Philippines -1.41    1.85    8.90  -2.42   -7.68   -4.86
Poland          -2.22    4.25   11.02   1.37   -6.00   -4.17
Russia           3.46   12.50   39.05    -      -       -
South Africa       -     -       -     -0.54   11.11   13.21
Thailand           -     -       -     -7.74  -17.56  -16.15
Turkey             -     -       -      0.16   -1.26    0.72
Venezuela        0.01   12.36   35.93      -      -     -

Other indices
                       Aug    YTD   12 mos
EMBI (Brady Narrow)   -0.98  15.77  31.29
LEI                   -0.98  11.06  19.81
GBI Global            -0.12  -1.57   1.66

CONTACT: J.P. Morgan & Co. Incorporated

Karl Pfalzgraf, 212/648-3904