daniel chigunwe
The worst losses in credit markets since the global financial crisis are likely over for now, as companies that loaded up on cash grow adept at navigating faster inflation and investors who yanked money from fixed income return.
That’s the view of some of the more optimistic investors, who have taken heart from a recent rally.
Bloomberg’s multi-currency corporate bond index recorded its best performance in more than 16 months last week.
Still, it lost 7,1 percent in the first quarter, the biggest slump since 2008.
JPMorgan Chase & Co analysts argue the rotation away from bonds into equities is likely to let up, with less selling in the second quarter.
Elisa Belgacem of Generali Investments remains overweight on credit, and Deutsche Bank sees investment-grade spreads declining over 12 months.
“Credit looks in a reasonable state to weather this particular storm. With strong balance sheet cash positions and record-low default rates the case appears to remain fundamentally positive” for credit in developed markets, Christian Nolting, global chief investment officer for Deutsche’s private bank, wrote. — Bloomberg.
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