Who is lending others money, get paid an interest rate. This applies to companies as well as for States that issue bonds. Notwithstanding this, the capital markets currently, a phenomenon that, paradoxically, could not be. Who rents these days the state of money, get no interest any more – but pays for it.
topsy-turvy world! The state deserves to get into debt. According to the state indicate bonds to the value of more than 15 trillion Swiss francs negative returns.
In Germany, all government securities for investors is a loss of business: In August, the yield on German Federal bonds with a maturity of 30 years has fallen for the first time under zero percent. The same is true for the Swiss, hot Swiss Confederation bonds. The Federal papers across all maturities negative. For investors, a disaster!
Switzerland – the safe haven of the
Still, many investors, above all institutional, pushing into the bond market. The reason is the fear of an imminent recession is likely to be in the first place. Political uncertainties such as the trade dispute between the two largest economies in the world – USA and China – also nourish the Worries of investors ahead of an economic Crash. It comes to the markets, tough, bonds are the safer Alternative compared to stocks and other financial products.
In the case of government bonds, most investors assume that the debtor, in this case, Switzerland, will pay the borrowed money back. “Many investors are grass the fear of becoming”, confirmed Thomas Stucki (55), Chief Investment Officer at St. Galler Kantonalbank. “Are you ready to buy negative yields, the safety of Swiss Confederation bonds to.”
in other words: The credit rating of Switzerland attracts investors magical. You speculate in addition, yet lower interest rates. “In the hope that the prices of the bonds rise even further,” says Stucki. A hope that is nourished by the renewed easing of monetary policy: The Central banks have already responded to the deteriorating economic data.
Further easing of monetary policy
In the last week had reduced the US Central Bank, the Fed, its key interest rate for the first time in 2008. At the same time, Mario Draghi (71), President of the European Central Bank further easing its monetary policy for the Euro area in view. Worldwide, the signals on interest-rate cuts are in order!
in turn, Thomas Jordan (56), President of the Swiss national Bank could force it to tighten and to cut the already record-low key interest rate of minus 0.75 per cent more.
“The development of the last years will continue,” also believes Stucki. “The average maturity of the new bonds will continue to increase as borrowers take advantage of the opportunity to Finance itself for a long time the ultra-low interest rates.” His forecast: “Institutional investors will stay with the market faithful to, because the Alternative is missing.”