2023-09-12 06:08:00
Althea Spinozzi ©D.R.
Does a euro zone remain?
For those who want security and therefore top quality financial ratings, Althea Spinozzi discusses Austrian debt in the short or medium term, comparable to Belgian debt, knowing that “Austria (S&P: AA +) has a better rating than Belgium (AA – )”. But the offer from the Belgian Treasury carried by the Minister of Finance remains a winner due to the creation of this tax loophole which allows citizens to benefit from a withholding tax reduced by half to 15%… The Saxo specialist then singles out the Italian debt . The gross yield on two-year Italian Treasury bonds is around 3.80% but they continue to climb. And to highlight German government bonds, already mentioned in these columns, which offer, through their particular status as zero-rate bonds trading below par, very attractive returns.
The new one-year government bond offers a net 2.81%, which is much more than the savings book Yield on government bonds ©IPM Graphics
Defensive strategy
Ms. Spinozzi’s idea is to build a real bond position varied over several maturities, counting on the fact that the European Central Bank (ECB) should soon reach the peak of its monetary policy tightening movement. What would follow would therefore be a gradual reduction in short-term interest rates, then an alignment of long-term rates which would have the effect of strengthening the value of the bonds held. In all cases, the return is assured, even if the rates were to remain high. Finally, even if Althea Spinozzi does not mention it, investors who are ready to face a risk hitherto covered by the umbrella of the ECB, why not ask financial intermediaries if they are not capable of finding a little Greek debt? The net yield on 2-year Greek government bonds is close to 5.80%, or just over 4% net. Fortune, it is said, favors the bold.
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