(Bloomberg) -- Venezuelan bonds have risen to the highest levels in three months as JPMorgan Chase & Co. begins to increase the weight of the securities in widely followed emerging-market debt indexes.

Funds have been adding Venezuela debt ahead of the re-weighting, which starts Tuesday, with notes from the government and state-owned companies rising an average of about 20% this year, according to data compiled by Bloomberg. JPMorgan will increase from zero the weight of the notes in the Emerging Market Bond Index series over a period of three months.  

Despite lingering in default for more than six years, the debt has found rekindled demand from traders as a presidential election approaches and the government in Caracas signals that it is open to eventually restructure its $154 billion pile of defaulted loans, bonds and other obligations. 

Read more: In Default on $154 Billion of Debt, Venezuela Is Ready to Talk

Government bonds maturing in 2027 trade around 21.5 cents on the dollar and those from state oil company, PDVSA, due in 2026 are close to 12.5 cents, according to traders and indicative pricing data compiled by Bloomberg. About $53 billion worth of the notes will be re-weighted, but the full impact of the rebalancing on prices isn’t likely to show up immediately.

“Some of the Venezuela bonds are likely going to trade in the mid 20s,” said Francesco Marani, head of trading at Madrid-based boutique investment firm Auriga Global Investors. “We have seen buyers of Venezuela adding ahead of the index gradually.”

Venezuela’s myriad opposition parties united behind a single candidate to run against President Nicolas Maduro in July, raising expectations that international observers will recognize the election as fair. That would add to recent political developments that have improved investors’ outlook for the country.  

Although the US restored oil sanctions based on Maduro’s lack of progress on electoral commitments, it left a window open for companies that want to continue doing business in Venezuela, while signaling negotiations with the Venezuelan government continue. 

Market “sentiment has been improving recently,” said Ramiro Blázquez, head of research at Banctrust. “It seems the opposition is becoming more pragmatic, a necessary, long overdue dose of realpolitiks.” 

JPMorgan had cut the weighting of the bonds to zero in its emerging-market benchmarks in 2019 amid US sanctions. 

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