JP Morgan: Greece a top bond pick, with strong fundamentals

Greece is emerging arsenic 1 of JP Morgan’s apical concern choices for the mean term, with the US House actively recommending positions successful Greek bonds. In its caller investigation of the enslaved markets, the US slope describes Greece arsenic a “top overweight pick”, acknowledgment to beardown macroeconomic and fiscal fundamentals and the stableness of the political landscape.

According to JP Morgan, Greece has underperformed against peripheral bonds successful caller weeks, peculiarly successful the 10-year. As a result, Greek bonds look “cheap” comparative to their humanities valuations, particularly against Spain. As reflected successful the report, the comparative valuation of Greece and Spain is diverging from fundamentals, which creates a wide concern opportunity. JP Morgan recommends a agelong presumption successful the 10-year Greek enslaved versus the Spanish bond, with comparative worth (RV) and a “moderate risk-on flavor”. This strategy is besides reinforced by the information that the commercialized offers a affirmative rollover output of astir 0.5 ground points per quarter, providing further inducement for organization investors.