Crisis: Eurozone bond record; Portugal enjoys a boom

ECB pumps new life into Italy. 2013 looks promising

03 January, 14:45

Brokers at the Franfurt Stock Exchange (Archive) Brokers at the Franfurt Stock Exchange (Archive)

(ANSAmed) - ROME - Investors with the courage to bet on Eurozone bond markets can slap themselves on the back: the eurozone sovereign bonds index is up +12%, its biggest spike since the birth of the Euro, and Treasury titles are up 21%. This is the first increase since 2009 and comes on the back of 2011's ''Annus Horribilis''.

Ireland's bonds rose 29%, and Portugal's a booming +57%: the biggest increase since 1994. The European Central Bank (ECB) is credited with pumping new life into the Eurozone. But the turning point, analysts unanimously agree, was when ECB President Mario Draghi pledged in July to do ''anything it takes'' to save the Euro. The subsequent development of an anti-spread shield, as well as banking supervision and budget policies, helped put the brakes on market panic and encouraged investors in the last part of the year to buy up Italian and Eurozone debt. Among these investors were Pacific Investment Management, which manages the largest bond fund in the world, and the financial giant Blackrock whose assets total 3.7 trillion dollars.

Looking ahead, 2013 seems to be fertile ground for buying and selling government securities. Investors are now looking towards the imminent elections in Italy as well as those in Germany in September. Meanwhile the markets await the return of Ireland and Portugal and already seem focused on an antispread shield request from the ECB by Spain. ''Madrid will request aid in the first half of the year,'' a source at Axa Investment said.

At auction on January 10 12 month treasury bonds for 2013 will go under the hammer, though requirements will be about 20 billion lower than those of 2012, while total gross issuance will be $60 billion lower. (ANSAmed).

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