DOES AMERICA LIKE THE ECU?
Last year, for the first time, investment bankers managed to sell $800 million in non-dollar denominated Yankee bonds to US institutional investors. But the question remains: can there be a successful market in the heartland of America for such exotic paper?
Bankers are promoting this new business hard. But a special Euromoney survey of 100 randomly-selected money managers turned up fewer than a dozen who are excited by non-dollar Yankee bonds. That doesn't mean there will never be a market, but it's going to take some cultivation.
"This is just another hype product from the investment banker,' grumbled one money manager who invests only in dollars. "Why should I even look at a yen bond?'
"It's just not an area of interest for us,' explained Thomas Thomsen, who manages fixed-income investments for Columbia Management Company of Portland, Oregon, the second largest investment advisory firm on the West Coast. The firm manages a $4 billion portfolio and Thomsen said it was unlikely that any of its funds would diversify into non-dollar instruments in the near future.
Aside from the stubborn conservatism of many managers, various legal and technical factors limit some investors to the US domestic market.