< The 2014 All-Europe Fixed-Income Research Team
Bank of America Merrill Lynch rises from runner-up to claim third place in its second appearance on this roster. Barnaby Martin’s London-based two-member crew likewise advances to No. 3 in General Strategy and notches a runner-up spot in High-Yield Strategy. One supporter lauds the BofA Merrill duo for providing the best market insights without following the crowd. Martin and his colleague predict that the euro zone will growth by 0.8 percent this year, slightly slower than the 1 percent consensus. This sluggishness, combined with high liquidity in noncore markets, will contribute to ongoing compression of European credit spreads, they contend. Although the strategists believe that short-end Bund yields will stabilize by the end of 2014, they generally recommend that investors take a high-beta credit bias and favor bank contingent convertibles, whose embedded cheapness make them an attractive bet. In addition, corporate hybrid bonds are projected to “offer 2.5 times the spread of nonfinancial corporate debt in Europe,” says Martin. |