LONDON, Aug 26 (Reuters) - A surge in Ireland’s 10-year government bond price over the past month shows it is decoupling from Portugal and Greece, reinforcing speculation it can be rehabilitated on world markets faster than its fellow euro zone bailout recipients.
The following graphic shows the relative 10-year bond performance of the cruelly acronymed PIGs:
For a detailed Reuters analysis of how investor attitudes to Irish debt began shifting a month ago, click here:
The Irish 10-year bond price has risen from as low as 52 cents in the euro in mid July to a 7-month high of 76.5 on Friday — a sure of almost 50 percent in just six weeks and suggesting rising hopes of full repayment among creditors.
Put another way, 10-year borrowing rates for the Irish government have fallen under 9 percent for the first time since February and are down from a high of 15 percent last month. That compares with current 10-year borrowing rates in Portugal of 11.1 percent and more than 18 percent for Greece.
Ireland was bailed out by its European Union partners and the International Monetary Fund to the tune of 85 billion euros on November 28 last year just after its 10-year borrowing rates topped 9 percent.
But buyers of Irish debt at the start of the year would now be in the money, especially dollar-based ones who would also have seen the euro rise almost 8 percent against the U.S. currency since January 1.
Investors taking a punt on a benchmark of European equities over the same period would have lost almost 10 percent.
Graphic by Scott Barber; Compiled by Mike Dolan; Editing by John Stonestreet