New hope on debts sparks rise in bonds
INVESTORS are convinced that Ireland will fulfil its commitment to repay its debts on time.
The positive sentiment has now pushed Irish government bonds back to pre-bailout levels.
A total of €6bn of Irish government bonds due to be repaid next year were trading at 1pc above face value.
In contrast, in July last year, the same bonds were being traded at a quarter of their face value.
Ireland's sovereign bonds have been the best performers in Europe over the past six months, with the yield on two-year paper dropping from a high of 24pc to just over 5pc, prompting some investors to ask when Ireland is going to follow Iceland's June 2011 return to global capital markets.