Benign economies to lift bond markets

Panellists on the Economists’ Bond Market Crystal Ball discussion at the Euromoney International Bond Congress this morning were divided in their investment advice for 2001.

  • 16 Feb 2001
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George Magnus, global chief economist at UBS Warburg, recommended balanced funds and investment credits rated double-B or above. Magnus said, however, that he "could not rule out the inclusion of some equities".

Others on the panel agreed that credit products would probably outperform equities this year. Ian Harwood, global head of economics and strategy at Dresdner Kleinwort Wasserstein, said that he views the US stock market as overvalued. "While tax cuts during 1998 improved consumer confidence and bolstered Nasdaq," said Harwood, "the two interest rate cuts by the Federal Reserve this year have failed to produce the same result."

Elga Bartsch, senior European economist at Morgan Stanley Dean Witter, said that she expects European equities to fall 10%-15% in the first half of the year, before rebounding in the second half. In what Bartsch called a difficult time for equity markets, fixed income products could be "the bridge through to the other side".

David Miles, professor of finance, Imperial College, University of London, said that inflation, which he described as "the real killer", was "dormant almost everywhere", creating an "extremely favourable world environment for bonds".

But others, such as César Molinas, chief European debt strategist at Merrill Lynch, said that investors will look to the stock markets as an alternative source of investment now that government debt levels have fallen.

Reduced government borrowing has created a shortage of government debt, with long duration assets particularly rare. One panellist suggested that the only bond market alternative for buyers of 30 year government paper would be corporate issuance.

However, there was also the warning of a potential conflict between fiscal austerity and tax cuts that might cause government deficits to edge higher.

  • 16 Feb 2001

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 20,521.83 80 6.93%
2 Barclays 20,382.90 37 6.89%
3 JPMorgan 18,760.94 72 6.34%
4 Goldman Sachs 17,444.96 41 5.89%
5 BNP Paribas 16,525.22 36 5.58%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 HSBC 48,528.41 214 6.32%
2 Deutsche Bank 44,075.51 161 5.74%
3 BNP Paribas 41,452.79 240 5.40%
4 JPMorgan 37,278.65 134 4.85%
5 SG Corporate & Investment Banking 36,258.27 187 4.72%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 1,607.28 5 24.01%
2 Credit Suisse 1,301.65 4 19.45%
3 UBS 970.80 3 14.50%
4 BNP Paribas 522.35 4 7.80%
5 SG Corporate & Investment Banking 444.17 3 6.64%