HALISTER1: Daiwa SB’s Kunibe Sells BTPs, SPGs for USTs Ahead of Brexit Vote

Daiwa SB’s Kunibe Sells BTPs, SPGs for USTs Ahead of Brexit Vote

(Bloomberg) -- Shinji Kunibe, head of fixed-income management at Daiwa SB Investments, has cut holdings of short-dated sovereign bonds in Italy and Spain and shifted to Treasuries and German bunds.
  • “Short-term Italian and Spanish notes were rock-solid even during May when U.S. market priced in a rate increase, but selling of these European securities has accelerated this week,” Tokyo-based Kunibe says by phone today
    • “There is no choice but to hold Treasuries and bunds in case of Brexit,” he adds
  • Investment in bunds are hedged against exposure to euro fluctuations: Kunibe
  • If U.K. decides to leave EU, its shock to markets could be equivalent to Lehman crisis: Kunibe
  • NOTE: Yield on Italy’s 2-yr note has risen 13 bps this week to 0.088%, while similar-maturity yield in Spain has increased 11 bps to 0.050%
  • NOTE: Daiwa SB Investments has $51b in total assests under management as of end-March, 2016
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Shinji Kunibe (Daiwa Securities Group Inc)

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