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Monday 20 February 2017

Standard Life says periphery debt just for ‘adrenaline junkies’

Published 07/09/2010 | 11:56

Standard Life Investments said it remains skeptical about the fiscal outlook for Europe’s most indebted nations and isn’t tempted to buy as Irish, Greek and Portuguese bonds get cheaper and yields rise.

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“You have to be an adrenaline junkie to be very active in those markets,” Frances Hudson, head of global thematic strategy at the division of Standard Life Plc, said in an interview in London today.

“We aren’t heavy in any of the peripherals. It’s obvious people are going to buy German bunds for safety.”

Greek 10-year government bonds fell today, widening the yield premium investors demand to hold the debt instead of benchmark German bunds to the most since May 7.

That was the last trading day before the European Central Bank said it would buy sovereign bonds to back a European Union bailout plan.

Standard Life Investments, which is based in Edinburgh and has $175bn of assets under management, prefers sterling assets to those denominated in euros, Hudson said.

Perceived political stability in the UK is drawing investment inflows from overseas, she said.

“We’ve had a series of elections in developed countries this year and all of them produced less-decisive outcomes,” said Hudson.

“We still don’t have an effective coalition in place in Belgium. Australia is struggling to form one. This makes the UK look better by comparison.”

Bloomberg

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