New investors have appeared on the Hungarian market for dollar bonds, while others’ presences have significantly decreased. Surprisingly, investors from Taiwan have appeared; two firms have purchased Hungarian papers that will expire in 2041.
In their report last spring, they concluded that there are six participants on the market with stock reaching $100,000,000: BlackRock, Vanguard, Prudential, JP Morgan, Goldman Sachs and Manulife.
In their new examination, they only looked at investors with stock of over $10,000,000 in each dollar bond case.
Four of the previously mentioned investors are still in the lead; however, Prudential has sold Hungarian papers in huge items, over $400,000,000 disappeared from their position of nearly $500,000,000 last year. Goldman Sachs has dismantled their position of almost $100,000,000 almost entirely.
Vanguard has taken over BlackRock’s throne, as in Vanguard’s case, there was only a minimal decrease, while BlackRock decreased their exposure by over $350,000,000.
The dismantling of stock by big owners can be explained with two things:
- They could have profited, meaning they could have gotten out of the papers with a considerable gain due to the constant rise of exchange rates in recent years.
- There was some chaos in the American repo market last fall, and some overseas investors might have had to liquidate suddenly.
The Government Debt Management Center has appeared on the market as a purchaser and bought back dollar bonds of almost $800,000,000.
Along with the Government Debt Management Centers, others have also appeared on the market who only had smaller positions before or were not participating at all, according to Reuters’ data.
This could be the reason that, compared to last year’s six $100,000,000 big owners, there are seven this year, despite Prudential and Goldman almost entirely getting out.
In the 5th place is Mason Street Advisors, who had over $50,000,000 exposure in Hungarian papers last year, but purchased another $200,000,000 in addition to it.
The also American Metropolitan Life Insurance has a Hungarian exposure of almost $100,000,000. New participants have also appeared, such as Wellington Management Company who have built a position of over $90,000,000, and Invesco PowerShared Capital Management. British Pictet Asser Management can be put in the same category.
What is even more surprising than the American and British participants is that, in the past month, Taiwanese investors have been buying significant amounts of dollar bonds on the Hungarian market. Two of them are in the above $100,000,000 category. KGI Securities Investment Trust and Cathay Securities Investment Trust are the third and fourth biggest participants, respectively.
There is not a lot of information about the two Eastern firms: KGI exists since 2001 and is the subsidiary of China Development Financial. Cathay is the biggest financial group with, according to their website, $21.4 billion managed by them.
There is a third participant from Taiwan on the market as well; Fuh Hwa Securities Investment Trust has built a position of $50,000,000 in the past months.
It is safe to say investment firms from Taiwan see potential in the Hungarian market.