Bonds

[kiwi2007]

Dire economic outlook should be positive for bonds: Nikko

The worse the economy is, the more positive it is for investors in fixed interest, and "it's looking pretty dire at the moment," according to Fergus McDonald, head of bonds and currency at Nikko Asset Management.

https://www.goodreturns.co.nz/article/976522211/dire-economic-outlook-should-be-positive-for-bonds-nikko.html

[mcdongle]

As long as they can pay the bonds back i suppose

[BlackPeter]

Dire economic outlook should be positive for bonds: Nikko

The worse the economy is, the more positive it is for investors in fixed interest, and "it's looking pretty dire at the moment," according to Fergus McDonald, head of bonds and currency at Nikko Asset Management.

https://www.goodreturns.co.nz/article/976522211/dire-economic-outlook-should-be-positive-for-bonds-nikko.html

The trick is to sell the bonds at the time when shares are at the bottom and buy shares instead. So, yes, if you feel it still gets worse, than by all means buy bonds. Just make sure you dance close to the exit ... as soon as stocks go up (and they will at some stage), you don't want to lose out with all these bonds in your portfolio ...

[Onemootpoint]

Watch Aaron Ibbotson explain his bearish research exclusively on today's episode of Markets with Madison.

https://www.nzherald.co.nz/business/stand-off-why-the-nzx-may-be-next-in-line-for-double-digit-correction/UUZJJWA5AJEVZIG6A6BWFCMZAI/


A 10 per cent drop over the next 12 months was more realistic, he said, although he wasn't forecasting that per se.

For a deeper correction to occur, he said the market would need to re-establish its historical relationship with long-dated bond yields.

"Today, that relationship has pretty much totally broken down."

[kiwi2007]

Channel Infrastructure New Zealand (CHI) has announced that it plans to issue a new 6-year senior bond.

The bonds have a minimum interest rate of 6.75% which will be fixed for the 6-year duration.

CHI will pay the transaction costs for this offer.

[Henry Filth]

I wonder what CHI want the money for? Capex? Expansion? Or rolling over existing debt?

[kiwi2007]

I wonder what CHI want the money for? Capex? Expansion? Or rolling over existing debt?

a) repaying a portion of Channel Infrastructure's existing bank debt;
b) redeeming on 1 March 2024 any Subordinated Notes[1] that are not otherwise purchased on the Issue Date under
the Exchange Mechanism[2]; and
c) general corporate purposes.
The Bonds will also provide diversification of funding that aligns with an infrastructure business.

[Henry Filth]

Right, thanks. I'll take that to mean rolling over existing debt plus reducing the owner's equity risk, and avoid

[kiwi2007]

Right, thanks. I'll take that to mean rolling over existing debt plus reducing the owner's equity risk, and avoid

They may well have to up the 6.75% offer a bit to get them away. We'll find out next week.

[kiwi2007]

Well, we found out today, 6.75% it is and oversubscribed to boot.

[Basil]

https://www.nzherald.co.nz/business/jarden-wealth-weekly-why-bonds-are-back/VAQ3VQE77NB4FKAWIXLM2THDTQ/

[kiwi2007]

Interesting to compare current bond and bank deposit rates against the average Kiwi saver funds over a 10 year period:

In todays Stuff "Milford was the top performer in the conservative category, with 5.7% a year, balanced category at 8.5% and growth, at 10.1%. Generate was top of the moderate funds, at 5.2% and aggressive funds, at 9%.

The averages for the types of funds, in comparison, were 3.9% a year for conservative funds, 4.3% for moderate funds, 6.1% for balanced funds, 7.6% for growth funds and 8% for aggressive funds."

https://www.stuff.co.nz/business/money/301003281/top-performing-kiwisaver-funds-of-the-last-decade

So a 6 to 7% return seems pretty good (as long as the original sum is returned at the end of the term).

[kiwi2007]

Good article in the FT the other day mainly aimed at the bond market; "You've missed the 5% 10 year, don't miss the 4.5%.."
Probably some relevance here.

Chris Lee pretty positive on bonds too btw.

https://www.ft.com/content/3b925ab5-9e67-4d28-a7f1-e078d5434d15

   "We're not going to see 5 per cent on the US 10-year again," said Karen Ward, chief market strategist for Europe at JPMorgan Asset Management. "If you missed 5, don't miss 4.5. Bonds are very high on the Christmas wishlist in my house.".....

"..
   "Soft landings are a bit like unicorns. They don't exist," said Mike Riddell, UK fixed income manager at Allianz Global Investors, who is clearly in the latter camp. He sees an "extremely high risk of a recession".

"We adore government bonds," he said. "We're as full as we can be on government bonds and we're outright short on credit where mandates allow."
..."

[BlackPeter]

Good article in the FT the other day mainly aimed at the bond market; "You've missed the 5% 10 year, don't miss the 4.5%.."
Probably some relevance here.

Chris Lee pretty positive on bonds too btw.

https://www.ft.com/content/3b925ab5-9e67-4d28-a7f1-e078d5434d15

   "We're not going to see 5 per cent on the US 10-year again," said Karen Ward, chief market strategist for Europe at JPMorgan Asset Management. "If you missed 5, don't miss 4.5. Bonds are very high on the Christmas wishlist in my house.".....

"..
   "Soft landings are a bit like unicorns. They don't exist," said Mike Riddell, UK fixed income manager at Allianz Global Investors, who is clearly in the latter camp. He sees an "extremely high risk of a recession".

"We adore government bonds," he said. "We're as full as we can be on government bonds and we're outright short on credit where mandates allow."
..."

I can see why Mike Riddell can see a recession for a country which has been vandalized for 12 plus years by a bunch of absolutly incompetent tories looking only after their private wealth.

Question is just - why would we assume that the British disease will impact the rest of the world as well?, I guess - they are neither the US nor China. They managed to drop their economy from #5 down to #6 in the world (or is it already #7? - France was already snatching their heels last time - hard to keep track). The times when Britain ruled the waves are now a long time ago. Thats what trusting in vicious liars does to your economy.

For the rest of the world I'd say the chances for a nice recovery in 2024 are pretty good - unless one (or more) of the wars gets out of control.

[kiwi2007]

"  "We're not going to see 5 per cent on the US 10-year again," said Karen Ward, chief market strategist for Europe at JPMorgan Asset Management. "If you missed 5, don't miss 4.5. ..."

So far the lady's right.

US Treasury yields sank after projections from the Federal Reserve showed a dovish tilt among members of its rate-setting committee.

Ten-year yields fell to 4.07 per cent, the lowest since September 1.

Black Peter.. Agree regarding the Tories but the article was more about bond yields in general (led by the US) rather than the UK in particular.