I get a Nice Pickup Buying Euro Bonds in Sterling Terms, Says Aberdeen SI’s Hickmore

The video discusses the implications of negative yields on corporate debt, particularly in the European market. It highlights the potential benefits for sterling investors and the opportunities in European corporate bonds. The conversation also covers the risks associated with negative debt, such as misallocation of capital and the potential for value-destructive M&A activities. The video concludes with expectations from the ECB regarding quantitative easing and market strategies, emphasizing the need to be long on duration and credit in the current economic climate.

What is one potential benefit for sterling investors buying Eurobonds?

• Currency exchange benefits

• Higher interest rates

• Increased liquidity

• Lower transaction fees

What is a potential long-term risk associated with negative debt?

• Decreased corporate profits

• Higher interest rates

• Misallocation of capital

• Increased inflation

How might companies misuse funds obtained through negative interest rates?

• Increasing employee salaries

• Paying off existing debts

• Boosting free cash flow for mergers and acquisitions

• Investing in research and development

What is one action the ECB is expected to take in response to current economic conditions?

• Implement new tax policies

• Restart quantitative easing

• Reduce government spending

• Increase interest rates

Why might investors consider being 'long duration' in the current market?

• To hedge against inflation

• To minimize risk exposure

• To benefit from short-term gains

• To take advantage of central bank support