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Market Analysis

  • European Equities - ‘Please, sir, I want some more!’

    The Euro Stoxx 50 is up 18% year-to-date. For many that may be an excellent return for a whole year let alone for just the first four months. But what’s even more interesting is that there are investors who have achieved a return better than that...

  • Investors are looking for yield

    Although I might sound a bit technical for the first few sentences of this article, rest assured you do not have to be a professional reader to understand where I am going. Simply speaking, in the high yield fixed income market exposure to an...

  • Quantifying currency gains

    It is not news that the Euro has depreciated considerably against major currencies in the past year. For most Maltese, these currency movements have resulted in a significant impact on the way we consume and the way we invest. During the past year...

  • What rating to choose for your High Yield portfolio?

    Sub-investment grade bonds can be broadly divided in BB-rated, B-rated and CCC & lower rated with the risk profile increasing in this respective order. The yields are naturally higher for the lower rated names but the movements are generally not...

  • Planning for retirement: a long term process

    Fixed Income and Equity assets have had a remarkable run over recent months, with bond yields (sovereign and corporate, investment grade and high yield) at record lows and (most) Equity Indices trading at record highs (or perhaps slightly off...

  • Investing in high dividend paying US stocks

    To attain a decent yield on a bond with an attractive risk/reward ratio is becoming a difficult task for investors. Yields on German Bunds continued to decline over the years to all-time lows due to loose monetary policy aimed at kick starting a...

  • European banks see money-printing leading to credit growth

    European banks see money-printing leading to credit growth

    Earlier this week the European Central Bank (ECB) released the results of its quarterly Bank Lending Survey (BLS). Although this publication was hardly mentioned by media and market commentaries it is an important leading indicator in my opinion...

  • The factors that will keep oil prices low at least until June

    The factors that will keep oil prices low at least until June

    Following the decline in the price of oil, investors may be tempted to bet on a rebound in price. In this article I will argue that both from a supply side and from the demand side conditions are not yet in place for a significant reversal of...

  • LVMH Moet Hennessy Louis Vuitton SE revenues surge on weak euro

    LVMH Moet Hennessy Louis Vuitton SE revenues surge on weak euro

    LVMH Moet Hennessy Louis Vuitton SE reported an impressive increase of 16 per cent in first quarter sales on the back of a weak euro and strong economic growth in the US. The group recorded excellent results in Europe and the United States. The...

  • Have local investors really come a long way?

    Have local investors really come a long way?

    It was a bright Sunday morning when my wife, daughter and I were off to a picnic with family and friends in an idyllic field in the north of Malta. I am not the type to get to a place super early; we were scheduled to meet the clan at 11am. With...

  • Don’t stop the music

    I walked into the office, turned on my Bloomberg screen and saw the DAX up 26% year-to-date, the 3% MGS 2040s trading close to the €120 level, the EURUSD at $1.06 and the 10-year bund yielding 0.16% (and that is not a typo, I did mean 0.16%)! Then...

  • What does the recent M&A activity imply for bond investors?

    Over the past few weeks some notable mergers and acquisitions (M&A) took place involving hundreds of billions. FedEx acquired TNT for USD4.8 billion, Heinz announced that it will merge with Kraft Foods and, just this week, Shell decided to take...

  • Are corporate bonds set for another positive quarter?

    We have been saying for quite a while now that Investment Grade European corporate bonds are trading historical lows, in terms of yields, mainly on the back of the widely talked about 22 January QE announcement by the ECB, which QE program...

  • Looking back at credit markets performance in March 2015

    March was pretty much a tale of two halves for credit markets. Credit in the Eurozone was better bid in the first half of March on the back of a strong start to QE by the ECB, only to suffer a mild correction at a later stage following a flurry of...

  • ETFs - A love-hate relationship

    I will start off by defining an Exchange Traded Fund (ETF). An ETF includes a basket of equities, bonds, commodities or assets which track an index. Take the Lyxor ETF DAX (DAX FP EQUITY) as an example. If you buy this ETF, you would be getting...

  • BMW, investing in the luxury auto sector

    BMW, investing in the luxury auto sector

    The automobile sector has outperformed the market year-to-date with the Automobile & Parts Index returning 32 per cent which is nearly twice the return achieved by the European Benchmark Stoxx 600 index which has returned over 16 per cent over the...

  • Ryanair – A share that deserves its wings

    Ryanair – A share that deserves its wings

    If someone had to ask me to name a company which comes close to being the most efficient in its sector, Ryanair would be it. Ryanair is an Irish low-cost airline headquartered in Swords, Dublin, Ireland, with its primary operational bases at...

  • Louis Vuitton – It’s not just about the bag!

    Moët Hennessy Louis Vuitton (LVMH) is a French multinational luxury goods conglomerate, headquartered in Paris. In 2014, the Group generated revenues of €30.6bln which came from the following segments; Wines and Spirits (13%), Fashion and Leather...

  • Taking stock of the current state of credit markets

    Taking stock of the current state of credit markets

    European credit markets, most notably Investment Grade corporates and sovereign bonds, have had a remarkable run so far in 2015, but so have their equity counterparts which surged ever since Mario Draghi officially announced the ECB’s QE program...

  • Are the prices of Malta Government Bonds right?

    This week the new Malta Government Stock 3% 2040 started trading; up to the time of writing, the last traded price has shot up to over 117 on the Malta Stock Exchange from its initial public offer price of 100. No wonder this issue was heavily...

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