Greg Bennett, the former Marlborough and Neptune manager who joined Argonaut Capital in late 2011, analyses why not all European companies are benefiting from a lower cost of debt.
"There is a party in the credit markets, but the real economy seems not to have been invited," says Bennett. "Credit spreads having tightened significantly over the last 12 months and interest rates are on the floor, yet GDP growth remains anaemic. Are we living in a parallel universe? With money being optically cheap it is tempting to conclude all participants are benefiting from a lower cost of debt. You would be right, but only to a degree. "To understand this we have split the universe of participants into large, listed companies on one hand and individuals and SMEs on the other. ...
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