Sun, Sep 21, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Australian bonds offer safe haven during financial crisis while their savers switch to self-managed pension pools

Thursday, July 26, 2012

Beverly Chandler, Opalesque London: Melbourne, Australia headquartered investment researchers Zenith Investment Partners’ Alternative Review reflects that in these troubled times, countries with apparently low risk of default - such as Australia - are seeing their 10 year bonds on a glide path to zero, while the 10 year yields on Italian or Spanish equivalents are doing the other thing.

Zenith’s Daniel Liptak quotes Fulcrum’s Gavin Davies who ascribes this phenomenon, not to central bank management or quantitative easing but by investors, driven by fear, who are buying bonds with perceived negligible risk as insurance.

Liptak’s view is that bonds in strong economies may be expensive and equities may be cheap for some time to come. "The recently announced low inflation rates reported in Australia should add downward pressure on RBA interest rate targets and consequently a negative for the Aussie" Liptak writes.

"We are inclined to continue USD credit in many flavours, paying for it through shorting the AUD. We are cautiously exploring methods to capture exposure in distressed European credits. While corporate balance sheets are on the whole healthy, we are not rushing into event driven strategies - given the macro risks, we believes most CEOs and their advisors will be more inclined to sit on their cash balances rather than increase M & A activity which we would expect to occur in more normal environments."

In another development in the Australian superannuat......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali