Archive analysis
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Monthly analysis – October
The summer’s over and both investors and bond issuers’ financial managers are back from theirholidays, with new bond issues following in quick succession around the world, and of course in Europetoo. We’ve picked the best of these, presenting a few …
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European bank sector:
back in the doldrumsAlthough the European Central Bank says we just need to give it some more time, the market is
increasingly sceptical about the impacts of the LTRO (Long-Term Refinancing Operation), the ECB’s
three-year credit program. While in the first quarter it …
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German government bond yields plunge to unprecedented depths
Low yields in the developed markets are the “by-products” of the 2008 crisis, as poor economic
prospects, central-bank bond purchases and high demand for secure government securities with good
ratings have all pushed yields in the same direction: downwards. In …German government bond yields plunge to unprecedented depths
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What makes a country a good debtor?
After a series of downgrades, all three credit rating agencies – Moody’s, Standard & Poor’s and Fitch Ratings – now list Hungary’s sovereign debt in the lowest investment-grade category, with a negative outlook, meaning that a downgrade of just one …
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The air thins above 100 dollars
After two and a half years, the price of Brent crude is once again being quoted above the psychological barrier of 100 dollars per barrel. On the one hand, the reaching of the 100 dollar level chimes with our medium-term …
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Bull or bear market ahead in 2011?
The revival of the stock market in 2009 – with equity-market yields of more than 20% – has not been followed by a further upswing this year. Despite two lengthy periods of optimism (in February-April, when the S&P500 rose 15%, …
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How severe will the impact of the bank tax be?
Hungary was among the first (the second after Sweden, to be precise) to impose a bank tax, but still, it was not so much the speed of its introduction as the extent of the tax that brought it into the …
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Do markets do more than just punish?
Much has been written, in many places, about the past few months’ deterioration in Hungary’s fundamentals; however, it’s a little known fact that the stark disparity between Hungary’s performance and that of its peers is due, in equally large measure, …
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How can we repay the IMF loans?
A review of the Hungarian IMF programme at the beginning of July revealed that the government was not a constructive negotiating partner, prompting the international body’s representatives to pack their bags. With the IMF’s departure, the opportunity has evaporated (at …
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Let’s price in the 15/B!
The result of the 15/B auction on 1 July took some market players by surprise. Previously the bond, which pays variable interest twice yearly and matures in 2015, was typically quoted at a price of above 99; indeed, the average …
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Estimating Hungarian bond yields
With an error-correction model
In recent years the yields on 5-year Hungarian government bonds have fairly consistently followed the Itraxx Crossover index, which tracks the premiums on high-risk European corporate bonds. Meanwhile, yields on 10-year annual government securities have been …
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Regional bond markets: how big is the liquidity premium?
An important element of the investment process is deciding whether what we’re buying or selling is cheap or expensive. Determining “valuation levels” in the case of bonds usually entails examining a certain premium or other, which means that we attempt …
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The elections through investors’ eyes
With only a few weeks to go before the general elections, many are justifiably asking what they can expect from the financial investments market around the time of the elections, and how it is that the current “growing uncertainty” is …
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A revival on the mortgage market?
At the start of February the National Bank of Hungary (MNB) announced that it would launch a programme to support the development of the forint mortgage loan and mortgage bond market, and the first buyback auction was duly held on …
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