Follow Portugal Investment Immigration and Portugal Economic news: Before the President of the European Central Bank (ECB), Mario Draghi, announced more details of the €1.1 trillion ($1.2 trillion) quantitative easing (QE) program, strategists had identified Portugal as the largest beneficiary.
According to a survey of 37 banks that trade directly with the German Debt Office, they expect that under the ECB's bond purchase program, Portuguese securities may record the best performance. Among the 20 financial institutions that responded, 14 chose Portuguese securities as one of their investment preferences.
What is the appeal of Portuguese securities? Strategists indicate that Portuguese government bonds are among the highest yielding included in the ECB's bond purchase targets, and the country's bond market is expected to be one of the markets with the highest saturation for ECB bond purchases. They noted that the relatively low liquidity of the country's securities also provides greater potential for price increases.
Peter Goves, a strategist at Citigroup in London, stated that the ECB's implementation of QE could technically exert the greatest pressure on Portugal. The pursuit of yield by investors remains very strong. He recommends buying 30-year Portuguese government bonds.
The ECB's QE is equivalent to a significant gift for the Portuguese government, as the country's financing costs in international markets are expected to decrease. The yield on Portugal's 10-year government bonds has already fallen to a record low this week. The country took advantage of rising demand in January to issue 30-year government bonds, marking the longest maturity bond issued since exiting the international assistance program.
