By John Plender
What is happening to investors’ risk appetite? The continuing downward pressure on US Treasury bond yields indicates a degree of caution in the air. For their part equity investors have been retreating into size and quality. There has also been a global sell-off in technology stocks after a period in which demand in the IPO market for shares in companies that made no money knew no bounds.
Yet there are pockets of gung-ho risk-taking in global markets where caution is being thrown to the wind. Untried instruments such as contingent convertibles in banking, for example, are finding enthusiastic buyers, reflecting the manic search for yield. Still more intriguing is the renewed American interest in Chinese company IPOs, despite the raft of accounting frauds that emerged from the now notorious Chinese reverse mergers on the Nasdaq exchange in recent years.