Welcome to our Corporate Bond Market Volatility analysis for October ‘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 October 24.
Market Volatility between Jul 24 - Oct 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:
From the above, we note that recurring names in 2024 include:
- Aroundtown
- Thames Water
- CPI Property Group
- Dignity
Given these names met the criteria to trigger a volatility event again, its clear 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 some of the largest movers and new names to this list, providing additional insight from the analytics available in our web application below.
Insights
New
A new addition to our list, Talk Talk bonds are down over 20 points over the summer and prices remain near the lows. In September, the company experienced a payment default but has not entered into bankruptcy filings or similar process, as it continues to operate under the terms established in the lock-up agreement pending DDE completion. TTG's DDE is anticipated to close in November 2024.
Yorkshire Water joins Thames Water as another UK based water utility company in the list this month. The sector remains under pressure after the result of the largest-ever investigation into customer service practices, as Ofwat ruled that the three companies had not done enough to prevent sewage from being pumped into British waterways.
Another new addition to the list is Engineering Ingegneria Informatica S.p.A., where prices have traded between a 92 - 108 pt range for over a year, which sharp moves in either direction frequent.
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.
Try our market-leading data today
Get limited access to the latest fundamental data and analytics in our web application for 2 weeks - no payments required. To get started, sign up here.