US investors more bullish on corporate debt-report

NEW YORK, July 15 (BestGrowthStock) – U.S. investors turned more
bullish on corporate debt in recent months, despite concerns
about the economy and Europe’s sovereign debt crisis, Bank of
America Merrill Lynch said in a new report.

About 68 percent of respondents to a survey conducted
between June 29 and July 14 had net long positions in U.S.
investment-grade debt, up from 61 percent in the prior survey,
completed in April, Bank of America said in a report released
on Thursday.

The survey participants consisted of 109 money managers,
hedge funds, insurance companies, banks and pension funds.

About 50 percent of survey respondents had net long
positions in high-yield debt, down 16 percentage points from
the previous survey but still one of the highest net longs on
record, Bank of America said.

However, the percentage of investors reporting money
inflows fell from record high levels in the previous survey.
About 24 percent of high-grade investors reported inflows, down
from 54 percent in the previous survey, while 33 percent of
high-yield investors reported inflows, down from 55 percent.

After a recent sell-off, high-grade investors expect
spreads to tighten over the next 12 months, perhaps reflecting
expectations that economic weakness will preserve liquidity in
the markets, the bank said, referring to the Federal Reserve’s
loose money policy.

Amid uncertainty about near-term prospects for the credit
market, however, investors have above-average cash levels.
About 30 percent of high-grade investors have above-normal cash
levels, and only 3 percent report below-normal cash levels, the
bank said. Thirty-nine percent of high-yield investors had
above-normal levels of cash and 12 percent had below-normal
cash levels.

Stock Market Today
(Reporting by Dena Aubin)

US investors more bullish on corporate debt-report