Managed FundsStay updated with Business News, Pakistan news, Current world news and latest world news with Business Recorder.., 31 Jul 2015 09:09:08 +0000SRA Framework 2.0en-gbGerman yields rise as stocks recover, Fed watched German bond yields edged up on Tuesday as equity markets steadied and risk appetite recovered, but strategists said further rises were likely to be capped by cheapening oil prices and a US policy meeting.

The euro zone's benchmark moved away from three-week lows hit on Monday when a slump in Chinese stocks saw investors rush for cover in top-rated assets, as global stock markets staged a modest recovery.

Investors were encouraged by Chinese equity prices' closing off day's lows, even though they ended with a loss on the day.

Receding fears around Greece have seen safe-haven bonds lose their appeal.

Investor expectations of a euro zone break up fell to 26.5 percent in July, its lowest level in six months, Germany's Sentix research group said on Tuesday.

But with oil prices hovering near six-month lows on supply worries -- feeding deflationary fears -- and the US Federal Reserve expected to remain guarded on any plans to raise rates after a two-day meeting concludes on Wednesday, strategists were cautious about predicting any sustained market direction.

"Asian equities have done a bit better than yesterday so there is not an outspoken risk-off sentiment at this stage," said KBC strategist Piet Lammens.

"But the oil price might provide some support for the Bund while we don't see any reason for the Fed to come up with a more precise data for lift-off with a question mark still very much hanging over China."

A series of bearish projections on US economic growth and inflation which were inadvertently disclosed on the Federal Reserve's website on Friday has added to speculation that US policymakers may hold off signalling a rate hike for September.

German 10-year yields rose 1.5 basis points on Tuesday to 0.65 percent, having hit a three-week low of 0.62 percent on Monday. Lower-rated yields in the bloc's southern periphery fared better, with yields on Italian equivalents down 2 bps at 1.88 percent and Spanish equivalents lower by about a similar amount at 1.92 percent.

Peripheral euro zone bond yields are also subdued as the slump in global commodities prices pushed back expectations when the European Central Bank will start normalising its ultra-loose monetary policy.

A below-estimate rise in single family US home sales in May and a drop in a measure of US consumer confidence for July had littile impact on the overall direction of the market.

DZ Bank said markets were currently pricing in a 35 percent chance of the Fed raising rates in September, but expects this to "decline noticeably" after Wednesday's statement with the Fed unlikely to make any specific reference to a near-term hike.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsTue, 28 Jul 2015 19:27:49 +0000
Kenyan T-bill yields to track overnight rates higher The yields on Kenya's Treasury bills are expected to rise further, pushed by rising overnight interbank lending rates and the central bank's term auction deposits.

The central bank has capped the weighted average yield on its 14-day, 21-day and 28-day term auction deposits - used to manage liquidity in the money markets - at 14 percent.

Due to tight shilling liquidity, the average interbank lending rate shot up to 16.3769 percent on Thursday from 12.7576 percent last Thursday.

"I think the rates are going to continue going up for a while. If you look at where the term auction deposits rate is at, and overnight is, the rates are bound to go up," a fixed income trader at one securities brokerage company said. Next week the central bank will auction 91-day, 182-day and 364-day Treasury bills worth a total 11 billion shillings ($109 million).

At this week's sale, the weighted average yield on the 182-day Treasury bill rose to 12.431 percent from 12.153 percent last week, while that on the 364-day bill jumped to 13.034 percent from 12.532 percent last week. The yield on the 91-day bill rose to 11.486 percent from 11.327 percent last week.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsFri, 24 Jul 2015 13:01:25 +0000
Euro zone bond yields rise as oil prices recover Euro zone government bond yields rose on Tuesday as oil prices recovered and unexpected debt sales weighed on the region's market, which had been expected to enjoy a supply-free week.

Expectations of more Iranian supply following a nuclear deal and concerns that economic worries in China will weigh on demand have put pressure on oil this month, stripping 11 percent off the price of crude so far in July.

Bond yields fell early on Tuesday against this background as lower oil prices hurt prospects of inflation returning to the European Central Bank's target anytime soon. But the recovery in crude prices later in the afternoon brought about a reversal in bond yields as well.

Spanish and Italian 10-year yields rose 9 basis points each to 2.04 percent and 1.99 percent, respectively. German 10-year Bund yields rose 2 basis points to 0.74 percent, having traded as low as 0.685 percent earlier in the day. "It has to do with commodity prices," Rabobank market economist Emile Cardon said.

The other factor weighing on the market was the unexpected wave of debt sales, traders said.

Britain sold its longest-dated conventional government bond in a syndicated deal for a 4 billion sterling 2068 gilt.

Slovenia sold 1.25 billion euros of a 10-year bond. It was considering adding a 30-year tranche to the trade, but this was dropped, according to Thomson Reuters news and market analysis service IFR.

Portugal will offer up to 1.25 billion euros in five- and 22-year bonds on Wednesday.

"There's a fair bit of supply at the long end (of the yield curve) and there's a bit of indigestion," one trader said.

Some traders attributed the underperformance of the peripheral bonds to persistent doubts about the sustainability of the deal between Greece and its creditors to avert bankruptcy and stay in the euro zone may.

Prime Minister Alexis Tsipras has faced a revolt in the ruling Syriza party over the mix of tax hikes and spending cuts demanded by lenders.

He is expected to get a second package of measures through parliament on Wednesday with the support of pro-European opposition parties.

Meanwhile, Slovak Prime Minister Robert Fico said his country will be among the first to ask Greece to leave the euro zone if it fails to meet the conditions of further aid.

"The Greek situation is far from resolved," Rabobank's Cardon said.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsTue, 21 Jul 2015 17:49:31 +0000
Nigerian bond sale misses target, investors seek higher yields Nigeria's latest bond auction fell short of its target as low yields deterred investors worried about the naira currency's weakness and rising inflation in Africa's biggest economy.

In yet another worrying sign for the government, which is already facing a funding crisis due to the decline in oil revenues, Nigeria raised 44 billion naira ($221 mln) at the bond auction on Wednesday, short of its target amount of 70 billion naira, the Debt Management Office (DMO) said on Thursday.

"For them to sell more bonds, the DMO would have had to increase its stop rate (yield ceiling), which it did not want to do," one trader said.

The naira has hit a series of record lows on the parallel market after the central bank three weeks ago curbed access to hard currency on the official interbank market for importers of a wide range of goods. Total subscription stood at 119.53 billion naira, the DMO said, down from 130.85 billion last month.

A total of 28 billion naira was sold in 5-year bonds at 15.28 percent, from 14.42 percent at the last auction in June.

The 20-year bond was issued at 15.29 percent to fetch 16 billion naira, compared with 14.24 percent last month.

Investors asked for yields as high as 16.745 percent for the 5-year paper and as much as 17 percent for the 20-year bond, the debt office said.

Nigerian inflation rose by 0.2 percentage points to 9.2 percent in June, its highest since February 2013, and above the central bank's targeted upper limit, after disruptions to fuel distribution affected food prices.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsThu, 16 Jul 2015 15:19:48 +0000
Yields fall further on Belgian treasury bills

imageBRUSSELS: Belgium sold 2.0 billion euros ($2.20 billion) of short-term debt at an auction on Tuesday, with yields falling for both maturities auctioned.

Three-month paper, the most regularly auctioned maturity, dropped to its lowest ever level of minus 0.238 percent from an earlier negative yield 0.211 percent at the last auction in late June.

Twelve-month treasury bills were sold for a negative yield of 0.179 percent, down from the negative 0.166 percent in June. Investors have paid, rather than received, interest for holding Belgian treasury bills for about a year.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsTue, 14 Jul 2015 12:07:31 +0000
US yields rise on hopes of Greece deal, Chinese stocks

imageNEW YORK: US Treasuries yields rose on Friday, hitting their highest levels in a week, as hopes of a Greece debt deal and a second day of recovery in Chinese stock prices pared the safehaven appeal of US government debt.

Benchmark 10-year Treasuries notes were last down 16/32 in price, yielding 2.359 percent which was up nearly 6 basis points from late on Thursday. It touched a session peak of 2.374 percent earlier in Friday's session.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsFri, 10 Jul 2015 12:55:30 +0000
Prices drop as China, US stocks rally YORK: US Treasury debt prices fell on Thursday as China's beaten-down stock markets rose after recent huge falls and Wall Street bounced back from sharp losses.

Yields on long-term Treasuries backed away from five-week lows reached this week on worries about the Greek debt crisis and a rout in Chinese equities, which undermined investors' confidence about global economic growth.

Chinese equities have slumped more than 25 percent since the middle of June, but on Thursday China's main stock market jumped 6.4 percent after a securities regulator ordered shareholders with stakes of more than 5 percent not to sell shares for the next six months.

The Chinese stock surge helped other equities markets around Asia and elsewhere pivot to gains after five days of losses, while depressing demand for safe-harbor bonds. Wall Street rose well over 1 percent before easing to gains of 0.40 percent in late trading.

European shares rose over 2 percent as Greek Prime Minister Alexis Tsipras rushed to finalize tax hikes and pension reforms needed to win new aid. Without the money Greece will have to print another currency, probably leading to its exit from the euro.

China's stock rise and brightening hopes Greece may strike a debt deal may be short-lived but had eased worries that had fueled the rally in Treasuries, according to Jack McIntyre, portfolio manager at Brandywine Global Investment Management in Philadelphia.

"There is a little sigh of relief," McIntyre said. "People are saying, 'the world may not be imploding'."

A Treasury debt auction and a flurry of rate locking deals by corporate issuers also spurred selling, according to Guy Haselmann, head of U.S. interest rate strategy at Scotiabank in New York.

"The Treasury market will trade fine tomorrow, meaning prices will go up and some yields will fall back again," Haselmann said. "The troubles in China, Greece and elsewhere are not going to go away."

Prices eased further after the Treasury sold $13 billion of 30-year bonds to soft demand.

Treasury data showed the government paying a yield of 3.084 percent, higher than traders had expected. Last month, the same amount of 30-year Treasuries supply cleared at a yield of 3.138 percent, a nine-month high.

Yields on the 30-year bond were knocked under 3 percent on Wednesday but were last at 3.1007 percent, reflecting a price drop of 2-9/32.

The 10-year note was down 27/32 in price and yielding 2.3049 percent.

Copyright Reuters, 2015

]]> (Imaduddin)Managed FundsThu, 09 Jul 2015 19:51:08 +0000
German Bund yields stabilise as Greek deal still possible German Bund yields stabilised on Wednesday as the possibility of Greece and the European Union converging towards a vital cash-for-reform deal before Sunday's deadline curbed demand for the top-rated asset.

The stabilisation follows a drop of more than 10 basis points on Tuesday as inflation expectations fell due to a rout in commodity markets amid deepening Chinese stock market losses.

Greece sold 1.625 billion euros of six-month T-bills to refinance a 2.0 billion euros issue maturing on Friday.

Analysts said the rollover was possible due to continued European Central Bank support for Greek banks, the main buyers of T-bills. French President Francois Hollande said the ECB would ensure that Greek banks had the minimum necessary liquidity to stay afloat until Sunday.

But ECB Governing Council member Christian Noyer warned the ECB had already interpreted its own rules "to the maximum" to help Greece and would be obliged to cut off liquidity as soon as there was no prospect of a deal.

Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans needed to keep the country in the euro zone.

They also said detailed plans were in place to cope with any Greek exit.

German 10-year Bund yields, which set the standard for euro zone borrowing costs, were flat at 0.64 percent. "While the Bund momentum looks strong and also underpinned by weak Asian equities, risks of conciliatory pro-deal headlines linger," said Commerzbank rate strategist Michael Leister.

Officials familiar with the talks said euro zone leaders welcomed the change of Greek finance minister, with Euclid Tsakalotos seen as easier to deal with than fellow Marxist academic economist Yanis Varoufakis, who resigned on Monday. Greek Prime Minister Alexis Tsipras told the EU Parliament he would deliver sweeping reform proposals this week.

But many analysts remain sceptical that European creditors will accept anything substantially different than what they have already put on the table, which was rejected by Greeks in a referendum last Sunday.

"Tsipras can presumably merely choose to accept and implement the conditions, which were clearly rejected in the referendum, or to exit the monetary union," said Norbert Wuthe, senior analyst at Bayerische Landesbank.

"Even if there is a chance that Tsipras will accept the terms, we reiterate our call for a Grexit with 70 percent probability. In this environment, Bunds should perform well, while periphery spreads are likely to come under pressure."

Ten-year yields in Spain, Italy and Portugal fell 5-10 basis points, to 2.23 percent for the first two and 3.07 percent for the latter.

The three countries are seen as the most vulnerable to spillovers from the Greek crisis, but so far episodes of contagion have been few and limited.

"The relatively calm bond market suggests that markets either believe in a last-minute deal or that the euro zone -- with the ECB determined to use all the instruments available within its mandate -- can easily stomach a Grexit," said Martin van Vliet, senior rates strategist at ING.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsWed, 08 Jul 2015 12:11:49 +0000
Russian FinMin sells 10bn roubles of 2020 OFZ bonds, avg yield 11.24pc

imageMOSCOW: Russia's Finance Ministry sold 10 billion roubles ($175 million) of OFZ government bonds at auction on Wednesday at an average yield of 11.24 percent, Reuters data showed.

It sold all of the floating-coupon OFZs maturing in January 2020 on offer.

Later in the day, the ministry will auction 5 billion roubles of fixed-coupon OFZs maturing in May 2019.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsWed, 08 Jul 2015 11:58:28 +0000
Thirty-year gilt auction draws strongest demand since Oct 2014

imageLONDON: British government bond prices jumped on Tuesday after a sale of 1.75 billion pounds ($2.71 billion) of 30-year gilts attracted the strongest demand for a conventional bond auction since October.

The UK Debt Management Office said investors bid for 1.89 times the amount of the gilt on offer, the strongest demand for any non-inflation linked British government bond since a sale of the same gilt on Oct. 7, 2014.

September gilt futures extended gains by as much as 40 ticks after the data, to peak at 116.89 at 0951 GMT, 98 ticks up on the day and erasing an earlier underperformance versus German Bund futures.

Ten-year gilt yields fell to their lowest since June 2 at 1.918 pct, 9 basis points down on the day, while 30-year yields fell to their lowest since June 15 at 2.682 percent, some 7 basis points lower.

Copyright Reuters, 2015

]]> (Shoaib-ur-Rehman Siddiqui)Managed FundsTue, 07 Jul 2015 12:37:31 +0000