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Market Analysis

  • Credit markets grind tighter during April

    Credit markets were poised for a strong performance in April were it not for the disappointment in the retreat in yields in the last few trading sessions of the month. Meanwhile, the Emerging Markets high yield universe in dollars extended gains...

  • The best of the DAX is yet to come!

    The German DAX is a total return index of 30 selected German blue chip stocks traded on the Frankfurt Stock Exchange. Year-to-date the index is up 18%. An excellent return for the first four months of the year and this is after a 10% pullback from...

  • Apple’s value is still attractive

    Apple’s value is still attractive

    Apple increased its quarterly profits by 35 percent over the same period last year driven by booming demand for the iPhone 6 and increasing sales of Apple products in China. Apple sold 61.2 million iPhones during the quarter exceeding most...

  • L’Oreal SA - "Because I'm worth it"… for shareholders

    L’Oreal SA - "Because I'm worth it"… for shareholders

    L'Oreal SA manufactures, markets, and distributes health and beauty aids.  The Company produces colorants, styling, hair care, cosmetics, skin care products, perfumes and dermatological and pharmaceutical products. The shares of L’Oreal have...

  • Understanding correlations within a risk management framework

    Understanding correlations within a risk management framework

    Understanding and managing portfolio and investment risks within an investor’s basket of investments is paramount in ensuring returns commensurate with the risks being undertaken. One of the crucial factors within portfolio risk management is...

  • 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...

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