Posted inEmerging MarketsFixed IncomeNORDICS

Danes see corporate bonds turn corner

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The Danes’ current appetite for high yield especially stands out, with 40 percent of respondents planning to increase their weightings, the highest percentage in Europe. Meanwhile, this doesn’t seem to be at the expense of equities, which are getting even more popular.

20 percent of the Danes who were interviewed by EIE’s researchers say they intend to increase their weightings in developed market corporate bonds, compared to 9 percent in the previous quarter. This perfectly balances with the number of people intending to sell. Together with the Swiss, Danish fund selectors are the only ones without a net negative view on credit.

Divergence with neighbours

The improving sentiment regarding bonds stands in marked contrast with that of Denmark’s Scandinavian neighbours. According to a February 2014 EIE survey, Swedish fund selectors’ sentiment on bonds is overwhelmingly negative. Just 13 percent of Swedish and 17 percent of Norwegian investors are planning to increase their weightings in high yield bonds, compared to 40 percent of Danes.

EM bonds out of favour

Meanwhile, the Danish fund selectors’ attitude to the emerging markets has soured. While the buyers and sellers of EM corporate bonds are perfectly balanced, the asset class is facing a downward trend. Similarly, the appetite for EM government bonds has also deteriorated, although it is still by far the highest in the Nordics.

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