Taiwanese fund expects returns on Romanian debt to better Asian sovereign bonds

Taiwanese fund Fuh Hwa Securities Investment Trust is looking to invest further in Romanian sovereign debt, with expected returns on Romanian debt higher than those on Asian sovereign bonds. The investments are part of increasing interest in the region following the near EUR 500 billion loans from the European Central Bank ( ECB ) to European banks over the next three years. According to Bloomberg, Taiwain's best performing debt fund is buying Romanian, as well as Russian and Turkish government bonds.

Fuh Hwa Securities Investment Trust Co Manager Bryan Wang said in an interview that “If you look at the portfolios of major European banks, they have a lot of exposure in Eastern Europe. Since the ECB is injecting funds into European banks, the money will flow into these countries, driving bond rallies.” Wang added that he expects returns on Romanian debt to overtake those on Asian sovereign bonds.

Romania and Turkey managed to place EUR 1.5 billion and USD 1.5 billion in 10-year Eurobonds in January. In 2011, Romania raised almost EUR 12 billion in state bonds, up on the previous year. Demand for the Romanian debt is already high. Romania’s bond auctions in January 2012 have met high investor demand, exceeding targets each time. On January 16 nearly EUR 800 million was raised and on January 23 almost EUR 300 million. Romania racked up a further USD 1.5 billion in 10-year bonds with a 6.87 percent yield at its first debt offering denominated in dollars on January 31. The full Bloomberg article here. Liam Lever, liam@romania-insider.com