Wednesday November 26, 2014 Search
Weather | Athens
12o C
9o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek, Portuguese yields rise on emerging market vulnerability

By Marius Zaharia

Greek bond yields hit their highest this year on Monday and Portuguese yields also rose, with the two countries seen as the most vulnerable in the euro zone to a spillover from emerging market tensions.

Tighter credit conditions in China and expectations of a further scaling back of the Federal Reserve's monetary stimulus have fuelled a large scale sell-off in emerging markets, with currencies in Turkey, Argentina and Russia hitting record lows.

The sell-off hit Greek and Portuguese bonds more than their euro zone peers. In stock markets, by contrast, Spanish shares were among the worst hit due to their exposure to Latin America.

Limiting the impact on Spanish bonds, two-thirds of the debt is in the hands of domestic investors, who are less likely to sell when global investors withdraw funds from high-yielding markets.

Roughly half of Portuguese bonds are owned domestically, making the country more vulnerable than Spain during major shifts in global sentiment. Data on Greece was not immediately available, but traders say many of the bonds are in the hands of foreign hedge funds.

Both Portugal and Greece are thought to have a significant U.S. investor base. The two bailed-out countries have also lured many investors with mandates to invest in emerging markets as their yields are close to those in similarly rated emerging economies.

"Italy and Spain have strong internal demand, while Portugal and Greece rely on investor demand from abroad and a lot of it has come from emerging market fund managers recently ... as they found the yield attractive, ING rate strategist Alessandro Giansanti said.

Portuguese 10-year yields rose 2 basis points on Monday to 5.32 percent, having risen more than 30 bps on Friday when the emerging market sell-off was more intense.

Equivalent Greek yields rose as high as 8.67 percent, their highest this year. This was 4 bps up on the day and about 30 bps higher than on Thursday.

Italian and Spanish yields also rose 2-3 bps higher on the day, but less than 10 bps higher than on Thursday.

"Portugal and Greece have certainly been hit harder than Italy and Spain. That reflects the low liquidity of those markets, not any fundamental concerns, said Nick Stamenkovic, bond strategist at RIA Capital Markets in Edinburgh.

Yields on German 10-year Bunds, the euro zone benchmark and seen as one of the safest assets in the world, were flat at 1.66 percent, having fallen 5 bps on Friday.

[Reuters]

ekathimerini.com , Monday Jan 27, 2014 (14:11)  
Debtors snap up offer for easier settlements
Belgium gas firm said to be eyeing DESFA
OLP approval paves way for investment in Piraeus
Airport tender exceeds expectations
Hundreds of migrants on crippled ship off Crete
Ships from Greece rushed to help after a crippled freighter crammed with hundreds of migrants floundered for hours Tuesday in gale-force winds and high waves in the Mediterranean Sea, offici...
Policemen suspected of working at Piraeus bar where shooting took place
At least three serving policemen are thought to have been working at the bar in Mikrolimano, Piraeus, where a 31-year-old man opened fire with an AK-47 early on Saturday, resulting in 15 peo...
Inside News
SOCCER
Atletico eyes last 16 berth against Olympiakos
Greek champion Olympiakos faces a tough task if it is to prevent last season's beaten finalist Atletico Madrid sealing its passage into the last 16 of the Champions League at the Vicente Cal...
SOCCER
EPO ends soccer suspension, Super League resumes
Soccer action will resume this weekend after the Super League convened on Monday, elected a new president and alternate president and sent a letter to the soccer federation that assures it t...
Inside Sports
COMMENTARY
Beware of the fallen idols
Akis Tsochatzopoulos, a legendary figure of the Greek socialist movement, a man who came very close to taking over the party that governed the country for half of the time following the fall...
EDITORIAL
The hard truth
The coalition government must tell the truth to the Greek people, even if this entails admitting to mistakes made over the last few months. The countrys citizens are fully aware of how cruc...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. Hundreds of migrants on crippled ship off Crete
2. Atletico eyes last 16 berth against Olympiakos
3. Debtors snap up offer for easier settlements
4. Belgium gas firm said to be eyeing DESFA
5. OLP approval paves way for investment in Piraeus
6. Airport tender exceeds expectations
more news
Today
This Week
1. Anastasiades to undergo heart surgery in the US on Dec 4
2. Cargo vessel carrying hundreds of migrants adrift southeast of Crete
3. Trade deficit widens by 8.7 percent during Jan-Sept period, says ELSTAT report
4. Two police officers among 9 arrested for drug trafficking
5. Fraport, Copelouzos offer highest bid for Greek regional airports
6. Stop Mediterranean becoming vast migrant cemetery, Pope tells Europe
Today
This Week
1. Double quake on Atalanti fault line rattles Greek capital [Update]
2. Biden heads to Istanbul amid tension over Cyprus EEZ violation
3. Give Greece a chance
4. Every age has its collaborators
5. Carlsberg takes control of Greek brewer Olympic Brewery [Update]
6. Scientists expand excavation of ancient Amphipolis
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2014, H KAΘHMEPINH All Rights Reserved.