QE will cheer EU corporate bonds market up

Investors will soon jump from sovereign bonds to corporate debt

“We should bear in mind that through its QE programme Europe will inject the equivalent of 10% of its GDP in the system, only the first year,” experts at Bankinter noted. “That money will sooner or later get to the stock markets pushing stock prices upward.”

Companies will have access to very cheap financing (probably under 1%), and that will make a share repurchase process inevitable. With a financing cost of about 1%, ROE usually higher than 5%-6% (which is not too much) and dividend profits of at least 3%,” they added.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

Be the first to comment on "QE will cheer EU corporate bonds market up"

Leave a comment