The assassination of a leading presidential candidate in Ecuador less than two weeks before the vote adds pressure to a country already wracked by political and drug violence.

Fernando Villavicencio, an anti-graft crusader and journalist, was murdered while leaving a political rally at school in the capital city of Quito late on Wednesday. Warring cocaine cartels have turned the once-peaceful country into one of the most violent places in the world, making law and order central to all candidates running in the upcoming elections.

As the nation reels, investors are on the lookout for potential unrest, and trying to assess how the shocking events will impact voters ahead of the Aug. 20 election. Villavicencio was the second-most favored candidate behind socialist Luisa Gonzalez, according to a poll released Wednesday. Conservative former sniper Jan Topic placed third, followed by Indigenous leader Yaku Perez and former vice president Otto Sonnenholzner.

“This will favor the extremes,” said Ramiro Blazquez, head of research and strategy at BancTrust.

The country’s assets are already trading at distressed levels, after dollar bonds lost more than 25% this year, one of the worst performances in emerging markets globally. Losses accelerated after voters rejected referendum proposals and political opponents mounted an impeachment campaign against President Guillermo Lasso, prompting him to close congress and triggering a snap vote.

Distresed Debt

The selloff has left bonds due in 2035 and 2040, some of the nation’s most liquid, trading at 30 to 35 cents on the dollar, levels they’ve been fairly steady at since March. The 2035 notes were quoted at 34.34 cents and the 2040s at 31.21 cents as of 9 a.m. in London on Thursday, according to indicative pricing on Bloomberg. Earlier on Wednesday, JPMorgan had recommended an overweight position on the nation’s debt.

“There has been relative social balance in Ecuador since Lasso used constitutional powers to dissolve the government and call for elections,” said Oren Barack, managing director of fixed income at New York-based Alliance Global Partners. “With very few details over the assassination, social unrest and protests are likely to occur over the coming days.”

Read More: Why Ecuador Leader’s Downfall Makes Investors Nervous: QuickTake

Ecuador has a checkered financial history. Since its independence, it has defaulted on its external debt 11 times, most recently at the onset of the coronavirus pandemic. While the investment scenario improved under Lasso, with international reserves near record highs, minimal debt service payments and a narrowing fiscal deficit, the return of a hard left administration could upend the outlook for markets.

That possibility has likely diminished with Villavicencio’s murder, according to Katrina Butt, senior economist for emerging markets at AllianceBernstein in New York.

“It might provide more support in consolidation of the center-right candidate,” she said, referring to Sonnenholzner. It could also benefit Topic’s security-focused campaign, but would be unlikely to provide a boost to the most leftist candidate, Perez, whose platform had little overlap with Villavicencio’s.

Ecuador’s election is one of a trio of Latin American votes this month in which crime and security are major issues. Argentina holds primaries on August 13 and Guatemala holds a runoff presidential vote on Aug. 20.

--With assistance from Zijia Song.

(Updates prices, adds comment from 9th paragraph, regional elections at end.)