International hedge funds are making the biggest bet against Italian public debt since 2008, the year of the great financial crisis. This was stated by the Financial Times in an article that opens its website.
The large bearish stance that would be taking place would be caused by growing concerns over political turmoil in Rome and the country’s dependence on Russian gas imports. The total value of Italian bonds to bet on a drop in prices reached its highest level since January 2008 this month, adds the financial newspaper, to a total of more than 39 billion euros, according to data from S&P Global Market Intelligence.
The rush of highly speculative funds to bet against Italy comes “as the country faces growing economic headwinds caused by the rise in European natural gas prices caused by cuts in Russian supplies and a tense political climate with elections looming in September, “writes the Ft.
“It is the country most exposed to gas prices and the political game is challenging,” said Mark Dowding, chief investment officer of BlueBay Asset Management, which manages approximately $ 106 billion in assets. According to the financial newspaper, the fund is short selling Italian 10-year bonds using derivatives. The Financial Times recalls that the International Monetary Fund warned that a Russian gas embargo would lead to an economic contraction of more than 5% in Italy and three other European countries, unless other nations share their supplies.
Source: Ansa
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