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Alpha Even When Markets Trade Sideways

27 March 2014 by HCM

Credit indices did not move that much today (even though volumes going through were healthy) nor did their fair value. But that do not tell the whole story, as some names experienced decent move. Utilities were weak across the board as they face regulatory pressure, as was confirmed by Ofgem proposing that the Competition and Market Authority investigate the UK energy market. ALOFP (Alstom SA) was also under the limelight after they were said to face wider bribe probe with the US trying to impose record fine. Its 5 year risk premium closed 13bps (65cts in cash price) wider. At the other end of the spectrum, financials are still feeling very strong. Senior protection is benefitting from the uninterrupted flow of subordinated issuance.