logo
  Join        Login             Stock Quote

Are New Issue Bonds Driving Trading Volumes?

 May 02, 2012 11:43 AM


(By Sober Look) Credit Suisse recently pointed out that the latest decline in global issuance of corporate bonds likely drove decreases in bond trading volumes. This has been observed in certain equity markets as increased IPO activity boosts overall volumes. The dynamics in credit seem to be oriented around inventories. With the overall declines in dealer inventories, trading desks concentrate their activities around new issue bonds. Even under the Volcker rule, temporary positions to facilitate new issue will be permitted. Secondary markets positions however are expected to be curtailed. And limited inventories translate into less trading and less liquidity. As the charts below show, daily trading volumes in the HY market declined with the drop in HY issuance.

Source: CS

This relationship between new issuance of bonds and bond trading volumes wasn't as pronounced last year. Fear driven liquidations by portfolio managers may have kept the volumes up even with little new issue in August and September. But with secondary market inventories tightening, the expectation going forward is that trading volumes will increasingly depend on the sizes and volumes of newly issued bonds.


iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageOil Prices Stubbornly Resilient Around $50 a Barrel.

The majority opinion seems to be that oil prices will drop further, popular targets being $30 and $40, with read on...

article imageADP: US February Payrolls Continue To Grow, But At Slower Rate

Payrolls at US companies posted another respectable gain in February, advancing 212,000 over the previous read on...

article imageAre You Prepared For Negative Interest Rates?

Last Tuesday, all eyes were on Federal Reserve Chief Janet Yellen. In prepared testimony, she offered a few read on...

article imageGreek Problems Born from Socialism

Our weekly commentaries provide Euro Pacific Capital's latest thinking on developments in the global read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

Are You Prepared For Negative Interest Rates?
More Articles on: Finance



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.