Investors advised to buy Greek bonds
Barely two weeks since Greece was on the brink of crashing out of the euro, some investment banks are now encouraging investors to return to its bond market.
Greece’s two-year borrowing costs have more than halved from peaks of over 58 percent hit this month even though they still yield more than longer equivalents – a signal that investors fear a default could be on the cards.
Some banks now see an opportunity for their clients.
RBS recommends buying five-year Greek bonds in the expectation that the European Central Bank will buy up Greek bonds under its quantitative easing program, which is conditional on Athens signing up to a new bailout deal.
“Greek sovereign debt inclusion in QE would be a major boost for the market and likely lead to aggressive tightening, at least in the short-term,” said RBS strategist Michael Michaelides.
[Reuters]
