Invesco Ltd. and Merrill Lynch against holding Spanish bonds.
2010-03-11 11:41 |
Invesco Ltd. and Merrill Lynch against holding Spanish bonds.
Invesco Ltd. and Bank of America Corp.’s Merrill Lynch unit analysts advised investors not to deal with Spanish bonds, because the Spain’s ability to reduce budget deficit is negatively affected by high unemployment.
Investors get a 70 basis-point yield premium for holding Spanish 10-year bonds rather than German bunds, compared with 310 basis points for Greek debt. This is not enough to compensate the risks of holding bonds of the euro region’s third- largest budget deficit.
Merrill Lynch Wealth Management in London believes that while Greece is the center of attention, it may take Spain years to recover from the recession.
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