Anthony Hilton: Bonds show investors are upbeat about economy
Saturday 29 June 2013
Scarcely a week goes by now without there being a bond issue for some mid-sized company, and this week was no exception with a convertible from Hansteen – a property firm specialising in industrial warehouses.
It’s 30 years since the Americans went down a similar route and developed their corporate bond market following the drying up of bank lending in the wake of the 1980s sovereign debt crisis. Now, at last, the bond markets here are also beginning to offer a genuine alternative to bank finance.
We should not underestimate the significance of this. While the UK banks are gradually returning to health, credit will remain tight because the dozens of foreign banks which used to operate in the UK market are no longer active here. British banks are not strong enough to make up the shortfall so alternative sources of finance like the bond markets are crucial.
The other aspect of the Hansteen issue, and a similar one the previous week from a regional shopping-centre specialist called New River, is what they say about the attitude of investors. Clearly the skills of the advisers and brokers count for a lot – Kinmont and Liberum did a good job with New River – but having said that, investors would not be picking up stocks like these if they were not a lot more optimistic about the UK economy than they were a few months back.
Industrial warehouses and regional shopping centres are known in the trade as secondary properties because they have tenants who find it hard to pay the rent when the economy turns down. So you buy secondary properties when you think that the economy as a whole is on the mend.
- 1 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 2 Optical illusion turns blue demon into brunette
- 3 German ethics council calls for incest between siblings to be legalised by Government
- 4 Saudi Prince Alwaleed bin Talal to donate entire $32bn fortune to charity
- 5 Mystery sea creature - with 'fur' and 'a beak' - washes up on remote Russian beach, baffling scientists
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
Jennifer Garner and Ben Affleck divorce: Memorable quotes from one of Hollywood's most scrutinised couples
German ethics council calls for incest between siblings to be legalised by Government
Saudi Prince Alwaleed bin Talal to donate entire $32bn fortune to charity
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
They are neither a 'state' nor 'Islamic': Why we shouldn't call them Isis, Isil or IS
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...
£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...