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China Is Back On The Radar

23 September 2014 by lberuti

During the summer, all the materials and commodities related credits have experienced of a very good run. Most of them belong to the high beta category, and they benefitted from the compression that was obvious in most markets. Higher yielding assets have outperformed across the board. But it looks as if people are being a bit more selective recently. Now that central banks have made their decisions regarding QE clearer and that the Scottish referendum is behind us, investors can focus once again on other themes. One which has been popular over the last sessions is the future path of the Chinese economy and the sustainability of its growth going forward. To play a potential slow down, the traditional names being targeted are miners and commodity related corporates. Investors have not waited long after the roll, and, in a generally weak trading session, the risk premium of these have been put under severe pressure, with MTNA, GLEINT, AALLN and TKAGR closing 14bps, 12.5bps, 10.5bps and 6.5bps wider respectively.