The market demands corporate bonds with interest rates of over 16%

Publish date: 20-01-2009
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Higher interests and shorter reimbursement deadlines make corporate bonds more attractive than state and municipal ones, according to 54 percent of the investors interviewed by analysts of KD Capital Management brokerage company.

"Corporate bonds provide higher yields and are more attractive in terms of liquidity on the stock exchange, as these are the best traded financial titles," KD Capital Management analyst, Adrian Duna, said.

Less than 31 percent of investors prefer state bonds and slightly over 15 percent are more interested in municipal bonds.

Investors are expecting fixed interest rates, above 16 percent, on new corporate bond issue and an annual interest in excess of 13.3 percent on state bonds, according to the average answers at the survey.

The shift of investors from shares to bonds was felt especially in the final months of 2008, when the value of corporate bond transactions soared. Transactions with International Bank for Reconstruction and Development (from the World Bank Group) and Banca Comerciala Romana (BCR) lender bonds made up 63 percent and 12 percent, respectively, of the total bond transactions on the Stock Exchange, worth RON 206 million (€51 mln), since launch until 9 January, according to KD data.

Business Standard

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