16 January 2019
Credere CIO, Oliver Dobbs speaks to EuroHedge about the implications of reduced liquidity in banking.
In the article, which can be read in full here (subscription required), Oliver discusses occasions where lead managers have decided not to make a market for their own bond issues, thereby impacting liquidity.
Oliver cites a $500m equity-neutral bond issued earlier this year by Carrefour as a "canary in the coal mine event". Dobbs states that after the deal was allocated, underwriters claimed the syndicate had not broken and that, therefore, they were unable to make secondary markets in the offering.
"This is the first time I have ever witnessed this behaviour... where major investment banks do not intend to provide liquidity even in their own investment banking-led business. I feel this could result in much-increased volatility if the broad market went through a period of weakness."
See Oliver's profile here.
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