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Thursday 28 August 2014

Reward for investors as Irish bonds among top performers in the world

Colm Kelpie

Published 31/12/2013 | 02:30

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Irish bonds were some of the best performing in 2013

IRISH bonds were among the top performing this year, according to a second gauge in a week.

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Two separate rankings in recent days have shown the extent to which the country's debt offering has become more attractive.

Irish bonds handed investors some of the best returns out of 34 countries, according to data from Bloomberg's World Bond Indexes released yesterday, as the Government continued to meet the targets laid down by the troika and then successfully exited the EU/IMF bailout programme earlier this month.

Ireland recorded a 12pc gain, making it the second best performer in the list.

Greece was the star of the show, however, earning a massive 47pc year-to-date return.

A separate gauge revealed just before Christmas, and which excludes Greece because its credit rating is too low, shows that Irish government bonds are close to marking their second year as the eurozone's top performing debt.

Running close behind, and potentially still with a chance to top the charts in terms of total annual returns at the end of the year, are Spanish bonds, according to data compiled on Markit's iBoxx EUR benchmark index, one of the most tracked bond indexes by investors worldwide.

Madrid has lured investors by implementing some painful reforms and getting back to growth.

Irish bonds have returned 11.7pc in the year to date while Spanish bonds have returned 11pc, the data shows.

It is the latest sign of returning confidence and comes just weeks after the country left the bailout programme.

The Government also went into the Christmas break on the back of a slew of positive economic data, with the Economic and Social Research Institute (ESRI) and business body IBEC predicting growth of nearly 3pc next year.

REGRET

In October the head of the State's debt management agency, the National Treasury Management Agency (NTMA), said investors who didn't buy Irish bonds after the bailout had lived to regret it.

Investors who believed the "Irish story" and bought government bonds when this country was locked out of the bond markets "made a lot of money", NTMA boss John Corrigan said.

Greek securities are beating international peers for a second year after returning more than 100pc in 2013, according to the Bloomberg World Bond Indexes.

Last year's rally was built on the decision of a coalition government to honour commitments made under terms of Greece's international bailouts, diminishing the risk the country would exit the currency bloc. (Additional reporting Bloomberg)

Irish Independent

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