Financials: safe as houses
Since the start of the year many investors and sell-side financials analysts have been marginally overweight on the financial sector, but spreads now look very tight. So are investors still getting reward for their risk?
For much of 2003, buy- and sell-side credit analysts have been warning that the corporate bond markets are pricing in good news that they have yet to receive. This has also been true of the financial sector where investors, struggling to find other sectors to be overweight in, have been marginally positive on banks and insurance debt, especially those with higher yield.
There have been some signs of improvement in European financials: HVB is selling assets to reduce debts, and
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