Investors wise enough to bet on Greek bonds as the nation?s two-year yields climbed to a record 30 percent have been rewarded with the best returns of any sovereign-debt market during the past two weeks, Bloomberg reported on Friday.
Greek securities returned 5.6 percent since June 16 through Thursday, the most among 26 indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spain was second with a 1.3 percent gain, while German debt lost 0.8 percent and U.S. Treasuries fell 1 percent, the indexes show. The euro rose 2.1 percent against the dollar in the period.
Yields on two-year notes plunged 3.8 percentage points since mid-June as Prime Minister George Papandreou survived a no-confidence vote, changed his finance minister and pushed 78 billion euros ($113 billion) in new austerity measures through parliament, positioning Greece to receive more European Union aid.
?Some of the more aggressive hedge funds might have been tempted,? said David Scammell, who manages $7.3 billion in European government bonds at Schroders Plc in London and who doesn?t own any Greek debt. Speculators who bet prices would fall may have closed out positions, while domestic investors ?get comfort from the high yields,? he said.
The two-year note yield fell for a fourth day, dropping 79 basis points to 26.51 percent as of 10:41 a.m. in London. It climbed to a record 30.32 percent on June 16 as Papandreou struggled to win support for budget cuts and Standard