Monday, May 17African Business News
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Tag: Junk Bonds

Junk bonds boom as coronavirus lures investors to risk

Junk bonds boom as coronavirus lures investors to risk

Capital Market
When the economic seas become stormy, investors usually tend to seek out “safe haven” assets — low-risk, low-yielding financial vessels — in which to place their money. But, as in other areas of society, the coronavirus pandemic has skewed long-held ways of thinking. Yield-hungry investors are venturing into ever riskier assets in their search for rapidly diminishing returns, their appetites whetted by the vast safety nets central banks have placed under their national economies. Demand for so-called “junk” or non-investment grade bonds is booming. By mid-August, a total $274 billion in junk bonds had been issued in the US, exceeding the total for the whole of 2019, according to data compiled by Bloomberg. Europe, too, where the junk bond market is much less developed th...