New five-year Greek government bond first issuance since 2010

Headlines

• New five-year Greek government bond first issuance since 2010.

• Market sentiment still strong but somewhat muted at the end of the week.

• Earning releases from major US companies next week will set the tone in the coming weeks.

• Fund flow update.

• This week we published the 22nd edition of the Scandi Handbook.

Market commentary

As yet another strong sign of increasing confidence in the peripheral European countries, Greece for the first time since 2010 returned to the international capital markets with the issuance of a five-year bond. The issuance was met with very strong investor demand – significantly exceeding markets expectations both with respect to order book size and yield. The Greek bond issuance confirms the current theme in the credit markets: ‘everything sells’ as long as the yield is high. This is illustrated by the fact that Greek banks according to Financial Times in the current market can issue bonds at the same interest rate levels as 10-year German government bonds a decade ago.

The conflict in Ukraine continued to make negative headlines but without having any real impact on the financial markets. Earlier in the week IMF published revised GDP growth forecasts for the world economy. The forecasts were more upbeat on 2014 and less on 2015 than previous (October 2013). Global growth is to average 3.6% in 2014―up from 3 percent in 2013―and to rise to 3.9% in 2015. In the euro area, growth has again turned positive but with significant deviations between the countries. The market sentiment was strong during the start of week but ended somewhat muted at the end with several large bourses (German and Swiss) down with more than 1%.

Next week several major US companies, Coca Cola, Citigroup, GE and Google, will release Q1 14 results. Due to these companies’ large business activities, worldwide operations and exposure to almost all major sectors their earning releases will influence market sentiments in the forthcoming weeks.