The volume of local corporate bond issues fell 55 percent in the third quarter compared with the previous two quarters, while the volume of government bonds issues rose to a record this year, according to a survey released this week by Shaarey Ribit Inc.
"The change of trend resulted from the volatility on the capital markets in reaction to the subprime mortgage crisis in the US. The retreat in the bond market led to a rise in yields and spreads and companies put a halt to making bond offerings, which in turn caused institutional investors to direct their investments to government bond issues."
According to the data compiled by Shaarey Ribit Inc. corporate bond issues amounted to NIS 10.3 billion in the third quarter compared with NIS 24.8b. in the first quarter and NIS 24.1b. in the second quarter of this year. At the same time, government bonds issues generated a volume of NIS 15.4b. in the third quarter of 2007 compared with NIS 3.7b. in the first quarter and NIS 2.7b. in the second quarter.
Still, the Shaarey Ribit survey showed that in the first three quarters of the year the total volume of corporate bond issues rose more than 50% to NIS 59b. compared with a volume of NIS 39b. during all of 2006.