The uncertainty generated among investors by the unresolved debt crisis has also affected sentiment in bond trading at Boerse Stuttgart. Turnover in foreign currency bonds has risen sharply in recent months. Right at the top of the list are bonds denominated in Norwegian crowns (NOK). In June alone investors at Boerse Stuttgart traded Norwegian debt securities with a volume of more than NOK 195 million - equivalent to roughly EUR 26 million. By way of comparison, investors in May traded Norwegian bonds worth NOK 72.76 million (some EUR 10 million).
Turnover in bonds from neighbouring Sweden also saw a steep rise in June. While turnover in Swedish government bonds stood at 12.33 million Swedish crowns (SEK) in May, equivalent to around EUR 1.5 million, in June the figure was already up to SEK 26.25 (approx. EUR 3 million). Although they were only introduced to trading a few month ago, foreign currency bonds from Scandinavia are now regularly to be found among Boerse Stuttgart's top sellers. And what is more, in addition to Scandinavian currencies, investors are also focusing on oceanic currencies- particularly government bonds from Australia and New Zealand.
"More and more investors are searching for ways of diversifying currency risks and are therefore looking for investment opportunities outside the eurozone," says Michael Görgens, Head of Fund and Bond Trading at Boerse Stuttgart. "The trend towards investments in foreign currencies can certainly be explained by the continuing euro debt crisis," says Michael Görgens.
The renminbi is also a possible alternative
Since traditional German companies such as Volkswagen, Siemens and, most recently, the Kreditanstalt für Wiederaufbau (KfW Group) started to issue renminbi-denominated bonds, retail investors have increasingly been eyeing the Chinese base currency as an alternative. As the renminbi is clearly undervalued in relation to the euro in the opinion of numerous analysts, many investors are consciously speculating on possible currency gains.