High yield market sees falling valuations and rising yields

Market has priced in cost of defaults, says Investec's Paul Griffiths

Paul Griffiths, Investec Asset Management's head of fixed income, told delegates at last week's Investment Showcase that with defaults in the European high yield market peaking, valuations have fallen and yield's have risen to levels not seen since the early 1990s. Griffiths, who joined Investec in mid-2000 and has since built a strong fixed income team at the group, said European high yield, a market 25 times as large as it was in 1997, has now priced in the cost of defaults. When that situation is overlaid with reference to historical precedent, Griffiths said, it becomes clear that i...