Comment - Tuesday View

Latest Tuesday Views

• ECB must slow covered bond purchases or risk the market’s longer term damage

  Faced with shrinking yields, covered bond investors have been deserting the market. Unless the ECB moves out of the way and switches to sovereign purchases fast, there is a real risk that these buyers will not be there when the extraordinary stimulus measures now being delivered are taken away.

  • 27 Jan 2015

• Troika needs to soften its stance on Greece – it isn’t working

  A lot of ink has been spilt over the moral hazard of allowing Greece to restructure its €240bn in Troika debt with haircuts. But seeing Greece's struggle with debt as an essentially moral problem leads to a stubbornness that precludes pragmatism.

  • 27 Jan 2015

• The EFSI is a force for good – but cannot cure infrastructure’s biggest blockage

  The European Commission’s ‘Juncker Plan’ to boost investment by €315bn is welcome. Scepticism that it cannot work because it only has €21bn of capital is unwarranted. The European Investment Bank is putting its shoulder to the wheel, and should not be underestimated. But don’t expect this to solve Europe’s infrastructure investment problems. Money is not the problem. The real obstacle is government indecision about what infrastructure it wants, and how investors will make a return.

  • 27 Jan 2015

• Finding alpha in high grade bonds? NIP it in the bud

  JP Morgan’s investor survey found 19% of high grade investors think new issue premium is the best source of alpha in the year ahead. With yields on the floor, it makes sense, but it is sign of a deep malaise in the fixed income market.

  • 27 Jan 2015

• The Yanks are coming! US issuers will muscle out Asian names in euros

  Asian investment grade bond issuers have made their presence felt in the euro market in recent years as they seek diversification. With the European Central Bank’s quantitative easing programme set to lower rates, now would seem the be the ideal opportunity for more Asian names to target eurozone investors. But with US large caps also eyeing euros, Asian credits are likely to get pushed aside.

  • 27 Jan 2015

• Arguments for and against ECB’s bond buying

  GlobalCapital has outlined some of the reasons why sovereign QE is not the answer to the eurozone’s woes — and in the interests of fairness, we’ve provided one suggestion as to why it could be.

  • 22 Jan 2015

• Market awaits solution it doesn’t think will work

  European participants in the capital markets are waiting, with bated breath, for Thursday’s European Central Bank meeting and the expected announcement of quantitative easing, as well as the outcome of Greece’s Parliamentary elections on Sunday. But an interesting dynamic has set in around what were once thought to be two of the most important events of the start of 2015: no one seems to care much about either anymore.

  • 21 Jan 2015

• Five against one — arguments for and against QE

  With even French president Francois Hollande saying earlier this week that the European Central Bank will announce sovereign quantitative easing on Thursday, there can be little doubt that ECB boss Mario Draghi is fitting the latest rocket into his bazooka as we write. Hollande may have had to embarrassingly backtrack since — with his office saying he was only talking hypothetically — but one can be certain that the flip flop is more down to a breach of etiquette, rather than an error.

  • 20 Jan 2015

• When regulators try to do credit analysis

  The European Commission wants credit ratings left out of financial regulation — a great move, if it can find something good to replace them. But it’s making the right decision for the wrong reason.

  • 20 Jan 2015

• Turkey’s central bank still needs to prove its independence

  Turkey’s central bank has had to fight hard to win respect as an institution independent of political pressure. With the country on firmer economic footing the central bank took its chance to cut rates — which will have delighted Turkey’s president. But the bank’s still shaky credibility and Turkey’s vulnerability to capital market vagary means there is more at stake.

  • 20 Jan 2015

• CSRC margin crackdown is a shrewd move

  China’s ECM market had a tough start to the week, after measures by the regulator to clamp down on excessive margin lending by brokerages took their toll on stock markets, with equities plunging the most in years. But investors that fell victim to this volatility should take it in their stride. The China Securities Regulatory Commission’s stringent approach is smart — and bodes well for stronger markets in the longer term.

  • 20 Jan 2015

• Dubai looks set to face challenging market in 2015

  Dubai World's announcement this week that it is closing in on another restructuring of its $14.6bn debt promise a big and timely kick of the can down the road for the emirate. But the overall picture for Dubai is deteriorating, structural problems remain and investors should strap themselves in for the bumpiest ride since the financial crisis.

  • 15 Jan 2015

• 1MDB IPO: A chance to get it right

  Just when it looked like state-backed 1MDB was finally ready to put its energy assets on the market for Malaysia’s biggest IPO in years, the listing has come up against another delay. That hardly inspires confidence in the sovereign wealth fund. But with a new president in place, there is now a chance to set things straight — not only for the country’s capital markets but also for the sovereign itself.

  • 15 Jan 2015

• MiFID: Why not just stop?

  Why is a piece of regulation which nobody wants, which the massed sovereign debt offices of Europe oppose, and which the regulator itself admits will barely work pushing remorselessly ahead?

  • 13 Jan 2015

• Dubai investors should get set for challenging 2015

  Dubai World's announcement this week that it is closing in on another restructuring of its $14.6bn debt promise a big and timely kick of the can down the road for the emirate. But the overall picture for Dubai is deteriorating, structural problems remain and investors should strap themselves in for the bumpiest ride since the financial crisis.

  • 13 Jan 2015

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