The best is yet to be, in 2015's best corporate bond rally

London

THE biggest corporate bond rally in emerging markets this year isn't finished yet.

Russian company debt has returned 7.8 per cent in 2015, the most among 45 markets monitored by Bloomberg indexes, except for Mongolia with a lone security. Yields could fall as much as 100 basis points from here as long as the political situation in the country doesn't deteriorate further, according to Robert Simpson at Insight Investment Management.

"Valuations are clearly in favour of buying Russian bonds," Dmitry Dudkin, the head of fixed-income research at UralSib Capital in Moscow, said by email on Thursday. "The corporate spread over the sovereign is wide. There's actually plenty of room and plenty of further potential performance, but the rally is of course conditional." Investors chasing yields are finding Russian companies an attractive bet this year as corporate credit joins government bonds and the rouble in a recovery from last year's s…