A strong case for hanging on

Article Abstract:

The UK market for convertible loan stocks has been hit by a rise in government bond yields due to a belief that UK interest rates are set to rise, and because yields are rising world wide. UK profits are increasing as shown by results for 1996, and this helps strengthen convertibles. Investors seeking security are not likely to find high rates offered by building societies which have a strong inflow of deposits. The UK government could affect investment income, and this would make vehicles providing capital growth more attractive.

Capital market, Capital markets

While shares gallop, convertibles stall

Article Abstract:

UK convertible loan stocks should be performing well since the stock market is strong and yields for 10-year government bonds have fallen. Convertibles have not, in fact, performed as well as expected and this creates opportunities for investors who can buy stock with a better yields than ordinary shares with a small conversion premium. One sector where cheap convertibles are available is real estate, and Chesterfield is one real estate company that offers an opportunity for investors.

Economic aspects

Souped-up convertibles to hit top gear

Article Abstract:

Convertible loan stocks are increasingly attractive as UK interest rates fall and building societies offer lower rates of interest to savers. UK long-dated government securities (gilts) have dropped due to concern over inflation and political risk, but convertibles have not been dragged down by gilts.Companies undergoing a recovery have seen their convertibles perform better. Such companies include Ransomes, which has seen a profits recovery.