Welcome to our Corporate Bond Market Volatility analysis for June ‘24 - European edition.
Every quarter, we dive into our datasets to identify volatility in bond markets via the Cognitive Credit app.
Why does Bond Volatility matter? Because volatility is an indicator of opportunity. As our regular readers will already know, once a bond has made a significant price move in a short period of time, it is more likely to make that kind of move again.
Without further delay, here is our European focussed Volatility analysis for June 2024.
Market Volatility between Mar 24 - Jun 24
As with our previous editions, we continue to identify opportunities by a 7 point move hurdle: If a bond moved through a 7 point range over the previous 5 closes, we classify that as a volatility event.
All data used for this analysis is available via the Cognitive Credit web application in partnership with S&P Global.
Here’s the list of companies that met the criteria this month, with notable move sizes:
Recurring names in this quarterly publication include:
- Aroundtown
- Atos
- Thames Water
- Altice
- CPI Property Group
All 5 of these names met the criteria to trigger a volatility event - reinforcing the point that missing the first move doesn’t mean you’ve missed the opportunity. The big moves will - potentially - come again soon!
As always, not every one of these opportunities will interest every type of investor - the opportunity set is quite diverse.
However, we’ve picked out a few of the names and added some additional insight from the analytics available in our web application below.
Insights
New
A new addition to our list, Iqera bonds are down over 20 points since their FY23 results. This co-incides with iQera's announcement on 22 April of hiring financial and legal advisors to evaluate various options to ensure its medium and long-term development.
Altice continues to feature in our analysis as the company - in conjunction with advisors - evaluates its options with regards to its capital structure.
Unsurprisingly, Altice is currently the 2nd most viewed name on the Cognitive Credit App this year, after Grifols.
Distressed Recovery
CPI bonds have have risen almost 43 points since the end of last year, but the company appears through our volatility filter due to a recent decline in bonds at the beginning of June.
Distressed Ongoing
Atos remains in our list again reiterating that this is a name that European investors must have their own opinion on.
Sterling Default
For those invested in GBP HY, Thames Water’s default in April resulted in 20 separate events being triggered for the company across GBP 1.55 billion of bonds.
Why do price moves matter?
Why look at price moves that have already happened? Because, as we discovered in our original post, with volatility comes opportunity. A bond that triggers an event is 20x more likely to appear on our Volatility list again than a bond in our coverage universe that hasn’t.
With Cognitive Credit, you can conveniently track market volatility and stay current on as many names as you need. With ready-to-use, fully customizable financials, you can form your own view quickly and easily maintain it with instant earnings updates.
And with built-in analytics, you can interrogate every metric, financial statement and instrument to enhance your understanding of an issuer.
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