Fitch Ratings said that its European fixed income investor survey show that investors are a little more optimistic than earlier this year.
The credit ratings agency’s (CRA)
‘European Senior Fixed-Income Investor Survey Q4’
shows that only 40% of survey respondents see a prolonged recession as a high risk to the European credit markets – down from 71% in July and less than half the all-time-high of 86% last April.
Eurozone debt problems and reduced monetary stimulus are seen as the main risks at 57% and 56% respectively although both are ranked lower than in the previous survey.
However, survey respondents are concerned about emerging markets (EM), with 60% of those polled expecting EM sovereign fundamental credit conditions to deteriorate. This is only marginally lower than in the July survey and closely followed by the EM corporate segment at 50% (down from 62%).
By contrast, sentiment remained buoyant for another risk sector as 28% voted high yield their favourite marginal investment choice, completing its unchallenged preferred status throughout this year. A less negative view on credit fundamentals for the sector emerged, with respondents now more balanced in their opinions on future direction. Views on new issuance volumes and spread tightening are the most bullish of all sectors.
Fitch’s Q413 survey was conducted from 1 October to 4 November and represents the views of managers of an estimated €7 trillion of fixed-income assets. The full survey is available on www.fitchratings.com .
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