The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Buy when the blood flows

When markets crash canny investors seize the opportunity to buy cheap. A few will make huge profits from the turmoil. But it's a risky business. Calling the bottom and selecting recovery stocks is challenging the analysts. No wonder the majority of investors are too terrified to come off the sidelines. Peter Lee talked to strategists about their 1998 plans.

Investors are well and truly spooked by the current financial crisis. Their nervousness, together with Asian inexperience in dealing with meltdowns, led to last month's pulling of a $2 billion bond for Korea Development Bank. During an investors' conference call on December 11, one fund manager asked for a breakdown in the maturity of Korea's short-term debt falling due: what was the mix between one-month, three-month, six-month and 12-month liabilities?

But the two senior Koreans - one from the finance ministry, the other from the Korea Development Bank - answering questions were unable to provide a coherent reply. In desperation one suggested the caller divide the total short-term liabilities by 12 to get a monthly figure. The naivety of the response raised both gasps of horror and laughter among the other fund managers listening in.

Later that day JP Morgan, lead manager for the planned three-year issue, bowed to the inevitable and announced its postponement until sometime this year. Earlier when sounding out investors, JP Morgan had hoped the deal might be completed at a spread of between 350 basis points and 400bp over US treasuries. That would have been quite a step up for a borrower whose bonds had traded at around 80bp over in the first half of last year and which, even in October, could have borrowed at 150bp over.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree