IACPM Poll Shows Credit Markets 'Have Turned Corner'
'The recovery isn’t well-established and is still vulnerable to a setback, but we are clearly past the panic of a year ago,' says industry organization's executive director
January 22, 2010
A survey conducted by the International Association of Credit Portfolio Managers shows that credit investors are more optimistic about credit spreads and defaults than they were three months ago, when the last survey was conducted.
“The global economy and credit markets have clearly turned a corner,” said Som-lok Leung, executive director of the IACPM. “The recovery isn’t well-established and is still vulnerable to a setback, but we are clearly past the panic of a year ago.”
Participants in the survey, dubbed the Credit Outlook Index, are asked a simple question: "Do you think spreads and/or defaults will go up, go down or stay the same?" If more respondents say spreads will widen or defaults will increase, then the index heads in a negative direction starting from zero. If more respond positively, the numbers head the opposite direction. The index ranges from -100 to 100.
The overall credit spread outlook index for the fourth quarter was 24.6, compared with -12 for the third quarter of 2009. The major credit default outlook for the next 12 months is 10.9. It was at -2.8 three months ago. This is the first time the measures have been in positive territory since the IACPM began conducting its survey in the fourth quarter of 2007.
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