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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Julius Baer Shifts to Indonesia Corporate Dollar Debt |
By Lilian Karunungan
Dec. 8 (Bloomberg) -- Bank Julius Baer & Co., the third- largest Swiss bank, is increasing holdings of Indonesia’s dollar-denominated corporate bonds to seek higher yields after selling the sovereign debt.
Indonesia’s dollar bonds are the third-best performing in the region, after Pakistan and India, giving investors a return of 43 percent this year, according to indexes compiled by HSBC Holdings Plc. Moody’s Investors Service on Sept. 16 raised the nation’s rating by one level to Ba2, two levels below investment grade, citing the economy’s resilience.
“If you want higher returns for your bond portfolio, you have to go down to the corporate level,” Neo Teng Hwee, head of portfolio management for Asia at Julius Baer, which has the equivalent of $142 billion of assets under management, said in an interview yesterday in Singapore. “The spreads for the sovereign dollar issues have tightened quite significantly. It’s more of a relative switch for the same Indonesian risk.”
Indonesia’s 11.625 percent dollar debt maturing March 2019 yielded 5.429 percent today, a spread of 2 percentage points over similar-dated U.S. Treasuries. They were sold on Feb. 27 to yield 11.75 percent, or 8.759 percentage points more than U.S. government debt.
Quasi-Sovereigns
Julius Baer sold its Indonesian government dollar debt holdings, bought earlier this year, two months ago, he said. It bought dollar bonds of Majapahit Holding, the company set up for the sale of debt of Perusahaan Listrik Negara, Indonesia’s state utility, Neo said.
Majapahit’s 7.75 percent bond due October 2016 yielded 6.82 percent today, a premium of 3.9 percentage points over seven- year U.S. debt.
“Indonesia will be a country that will continue to recover,” Neo said. “Indonesia could grow in the 5 to 6 percent range next year. The overall fiscal position in Indonesia is also very healthy.”
The $514 billion economy grew 4.2 percent in the third quarter from a year earlier after expanding 4 percent in the previous three months. President Susilo Bambang Yudhoyono won re-election in July, allowing him to push ahead with power, road and port projects.
Julius Baer also invested in the dollar bonds of state- controlled companies such as Korea Land & Housing Corp’s 4.875 percent note due Sept. 2014 and Petroliam Nasional Bhd. of Malaysia’s 4.25 percent sukuk issue maturing August 2014, Neo said.
The Swiss bank also favors the Chinese yuan, the Singapore dollar and the Indian rupee. The bank forecasts the yuan will appreciate 5 percent in 12 months time to 6.50 per dollar, the Singapore dollar will strengthen 2.3 percent to S$1.36 and the Indian rupee will rise 6 percent to 44. They were at 6.8282, S$1.3913 and 46.74 as of 3:56 p.m. Singapore time today.
“We are still long-term bullish on Asian currencies,” Neo said. “The Asian countries are running large current-account surpluses and the Asian region has higher long-term potential growth relative to the developed world.”
To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net.
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