Morgan Stanley Sees Bond Evolution in Trade Jump: Credit Markets
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Corporate-bond trading volumes are surging to the highest ever to start the year as investors adapt to a new reality of reduced dealer balance sheets by turning to electronically exchanged debt and smaller transactions.
Even as issuance of the securities slowed, the amount of investment-grade and junk bonds changing hands increased to $20.3 billion on average each day this year, 3 percent more than during the same period in 2013, Financial Industry Regulatory Authority data show. Bond investors are turning to exchange-traded funds at a record pace, with BlackRock Inc.’s junk-bond ETF posting record withdrawals and the greatest volume of bearish wagers ever.