Friday 15 December 2017

State's economic plan has worked, says Hasenstab

Michael Hasenstab bought more than €8bn of Irish bonds
Michael Hasenstab bought more than €8bn of Irish bonds
Colm Kelpie

Colm Kelpie

THE largest private holder of Irish sovereign debt has claimed the Government's economic plan has worked.

Michael Hasenstab, whose Templeton Global Bond Fund has heavily invested in Irish bonds, remained bullish on the Irish economy, claiming the State was "still doing a great job".

And he signalled that the Government's policy of slashing spending and hiking taxes had been correct.

"Ireland's still doing a great job. I mean, I think the extreme pessimism has now transitioned into some sort of comfort that the story is really working," he said, on a video posted on the website of US investment firm Franklin Templeton, of which he is vice president.

Mr Hasenstab has bought more than €8bn of Irish government IOUs on the international money markets, with reports that it could be closer to €10bn.

And he did it initially when few others would touch them.

He made the trade because he was convinced the Government would never default on its debts – and the gamble appears to have largely paid off.

A glance at the breakdown of the Templeton Global Bond Fund shows that Mr Hasenstab has not only taken a punt on Ireland, but also on Poland and other eastern European nations.

Amid fears that the Irish economy was faltering amid the turmoil in the eurozone, spooking investors, Mr Hasenstab has argued that the Irish government bonds make up less than 10pc of his bond portfolio, and that the portfolio is diverse enough to fend off any market volatility.

In an interview with the 'Wall Street Journal' earlier this month, he said that he hadn't added any more government bonds in recent months, but added that the market has good value.

"We still think Ireland has strong ability to repay its debts," Mr Hasenstab said. "We are quite comfortable on our holdings there."

National Treasury Management Agency boss John Corrigan has welcomed the interest of Franklin Templeton, stating that he would prefer to have 10 Franklin Templetons and not just one.

Performance at Franklin's Global Bond Fund bounced back last year after it trailed 91pc of rivals in 2011. The fund gained 16pc in 2012, better than nine out of 10 of its peers.

watch the video online at

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